The Justice Department announced Tuesday that PayPal has agreed to establish a new initiative waiving processing fees on $1 billion in transactions, valued at $30 million, to resolve allegations that its previous support for minority-owned businesses was discriminatory.
In 2020, following the killing of George Floyd, PayPal launched the Economic Opportunity Fund, pledging $530 million to assist Black- and minority-owned small businesses. The DOJ argued that program unfairly excluded other groups, violating the Equal Credit Opportunity Act.
PayPal denied wrongdoing but accepted the settlement, which requires it to create the Small Business Initiative. This program will focus on veteran-owned businesses and those in farming, manufacturing, or technology. The company must also appoint a director, assess small business needs, and submit annual reports to the government.
Acting Attorney General Todd Blanche warned in a statement: “American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans.”
PayPal faces no fine and was not found liable for the credit discrimination claims. The company said in a statement: “For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools. We’re excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity.”
The settlement is part of a broader Trump administration push to dismantle diversity, equity, and inclusion programs in both the private and public sectors. This aligns with recent actions like the launch of Moms.gov, which has sparked debate over maternal health and DEI rollbacks. Critics argue such moves threaten minority political power, as seen in the Supreme Court’s recent weakening of the Voting Rights Act.
PayPal’s new program will be monitored by the DOJ to ensure compliance. The company’s stock was largely unchanged in after-hours trading.
