PayPal Agrees to $30 Million in Fee Waivers for Small Businesses to Resolve DOJ Probe of 2020 Racial Equity Program
PayPal will waive an estimated $30 million in processing fees for roughly $1 billion in transactions and launch a new race-neutral small business initiative to resolve a Justice Department probe. The settlement, announced May 12, 2026, includes no admission of wrongdoing and comes as the Trump administration scrutinizes corporate DEI programs.
insurancejournal.comThe Justice Department announced a $30 million settlement with PayPal on May 12, 2026, resolving an investigation into the company's 2020 investment program aimed at boosting Black and minority-owned businesses. PayPal agreed to waive processing fees for roughly $1 billion in transactions, an amount estimated at $30 million, for eligible American small businesses that are veteran-owned or engaged in farming, manufacturing or technology.
The company will also launch a new small business initiative that does not account for the race or national origin of the business owners.
The DOJ had been probing whether PayPal's original program violated the Equal Credit Opportunity Act, a federal law prohibiting creditors from discriminating against applicants based on race. The program was launched in 2020 following the killing of George Floyd. Acting Attorney General Todd Blanche issued a statement announcing the settlement.
“This Department of Justice is delivering on President Trump’s vow to root out illegal DEI from every corner of corporate America,” Blanche said. ” The settlement does not include any admission of wrongdoing by PayPal. The DOJ acknowledged 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.
ABC News reported that the probe is one of a number launched under the Trump Justice Department scrutinizing companies that launched DEI initiatives. Republicans have cast such initiatives as unlawful and discriminatory. A PayPal spokesperson responded to the resolution in a statement to ABC News.
“For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools. ” The fee-waiver program targets specific categories of small businesses without reference to race. The announcement did not explain why the transaction fee waivers will be directed to veteran-owned businesses or those engaged in farming, manufacturing or technology.
The agreement marks the latest action in the Trump administration's broader effort to examine corporate diversity programs launched in the wake of nationwide social unrest in 2020. PayPal's original economic opportunity fund had sought to direct investment toward minority-owned enterprises during that period.
