DOJ reaches $30 million deal with PayPal over minority-owned business program
PayPal has agreed to waive $30 million in processing fees in order to resolve a federal investigation into an investment program that sought to boost Black and minority-owned businesses, the Justice Department announced Tuesday.
The probe is just one of a number launched under the Trump Justice Department scrutinizing companies that launched diversity, equity and inclusion (DEI) initiatives that Republicans have cast as unlawful and discriminatory.
DOJ had been probing whether PayPal's program, which was launched in 2020 following the killing of George Floyd amid social unrest around the country, violated a federal law prohibiting creditors from discriminating against applicants based on race.
In order to avoid further investigation, the company has agreed to waive processing fees for roughly $1 billion in transactions — estimated at $30 million -- "for eligible American small businesses that are veteran-owned or engaged in farming, manufacturing, or technology."
The announcement by DOJ does not explain why PayPal's transaction fee waivers will be directed to those specific classes of small businesses.
It has also agreed to launch a new small business initiative that does not account for "the race or national origin of the business owners."
“This Department of Justice is delivering on President Trump’s vow to root out illegal DEI from every corner of corporate America,” Acting Attorney General Todd Blanche said in a statement announcing the settlement. “American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans.”
The settlement does not include any admission of wrongdoing by PayPal, and under the agreement, the DOJ acknowledges it "has not made any determinations or findings regarding PayPal violating [the Equal Credit Opportunity Act] or any other federal law related to the economic opportunity fund."
“For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools," a PayPal spokesperson said in a statement to ABC News. "We’re excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity.”
