Major League Soccer has taken out a $25 million loan from a syndicate of eight Black banks, which will these financial institutions increase lending power with the goal of helping reduce the racial wealth gap.
The terms of the loan are not being disclosed in Thursday’s announcement. But the interest and fees will be paid in advance creating what’s called Tier 1 capital, which will almost immediately allow the Black banks to offer more loans and lines of credit in Black and economically disadvantaged neighborhoods.
The racial wealth gap, the disparity between the net worth of Black families and white families in America is more than $11 trillion dollars, according to Dr. William Darity of Duke University’s Sanford School of Public Policy. But he says the pandemic has likely deepened the disparity. According to the Federal Reserve, 82% of Black families have less wealth than the typical White family.