Department of Justice reaches settlement with PayPal over controversial program for minorities

The Department of Justice (DOJ) announced Tuesday that it reached a settlement with payments platform PayPal over allegations related to an alleged discriminatory investment program that would have been created for businesses owned by African-Americans and other minorities. As part of the settlement, PayPal will launch a new Small Business Initiative that will eliminate processing fees on $1 billion in transactions, benefiting U.S. businesses owned by veterans or operating in the agriculture, manufacturing and technology sectors.

The dispute in question dates back to PayPal's 2020 launch of its $530 million Economic Opportunity Fund, which was an initiative whose purpose the company explained as "expanding economic opportunity for underrepresented black and minority businesses and communities." Federal investigators reviewed the program for possible violations of the Equal Credit Opportunity Act, which prohibits creditors from making decisions based on race, color or other protected characteristics. While the DOJ noted that it did not conclude that the company had violated the Equal Credit Opportunity Act or any other federal law, officials argued that PayPal did not establish the initiative as a direct remedy to documented instances of past discrimination.

"This Department of Justice is delivering on President Trump's vow to root out illegal DEI from every corner of corporate America. American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans," Acting Attorney General Todd Blanche said in a statement. Also, Assistant Attorney General Harmeet K. Dhillon expressed her approval of the resolution by noting that "With this settlement, PayPal agrees that race and national origin should play no part in determining which small businesses deserve its investment and financial support."

For its part, a PayPal spokesperson said in a statement provided to Fox News, "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."