This continues a trend of the Hawks working to empower the Black community, with the Ressler Gertz Family Foundation in October pledging investments totaling $40 million to bolster economic empowerment in Black communities in the city. That included a $5 million investment in the Herman J. Russell Center for Innovation and Entrepreneurship, the largest nonprofit center for Black entrepreneurs in America. The Hawks also have been active with voting initiatives, becoming the first NBA team to use their arena as a voting precinct (more than 40,000 people in Fulton County cast their ballot at State Farm Arena during early voting for the general election, and they’re offering up the venue again for the coming runoff).
Banks can credit only about 10 times their Tier 1 capital, under federal regulation, generated by banking fees, the sale of stock and interest on deposits. With the support of the NBBF, “Black-owned banks are now better able to come together in order to become competitive with major banks, significantly increase the amount of money they can lend, and thereby increase the services they can provide to the communities they serve.”
Comer Capital Group acted as financial advisor to the syndicate, and Dentons acted as counsel.
“In minority-majority ZIP codes, Black banks are often the primary source for fair, non-predatory lending,” according to the Hawks’ news release, but since 2001, those numbers have fallen by 50-plus percent. “Today, there are just 18 Black-owned banks left, according to the FDIC. The retrenchment of Black banks has created bank branch deserts that have led to historic disparities between America’s banked and unbanked populations.”
Per the Federal Reserve, 49% of Black households were either unbanked or underbanked in 2019, compared to 15% of white families.
“Because Black-owned banks are so starved for capital, they’ve previously not been able to compete with major commercial banks or scale to meet the unique needs of borrowers of color, who are rejected for credit at twice the national rate,” said NBBF general counsel Ashley Bell. “Because of the Hawks’ leadership and commitment to financial inclusion, Black banks are finally playing in the major league.”
This action by the Hawks will have far-reaching results, according to Robert E. James, II, President, Carver Development & Chairman-Elect, National Bankers Association.
“The Atlanta Hawks are putting their money where their mouth is when it comes to being an ally of Black businesses, and Carver State Bank is proud to be the lead institution on this historic transaction,” James said.
“By selecting an all-Black bank syndicate to provide this financing, the Hawks are strengthening all of our banks. What we earn from this loan strengthens our collective ability to provide even more loans and financial services to Black small businesses and consumers, and we are able to show our ability to pull off a large, sophisticated loan transaction. Tony and his team are real allies in the movement for racial equity.”