PayPal Agrees to End Race-Based 2020 Lending Program, Redirect Support to Veterans and Key Industries in DOJ Settlement

PayPal signed a settlement with the Department of Justice on May 12 that will see the company waive $30 million in processing fees for $1 billion in small business transactions. The agreement resolves a DOJ investigation into PayPal’s 2020 program that guaranteed a $530 million investment for Black and minority-owned businesses.

The DOJ claimed that program was unlawful under the Equal Credit Opportunity Act, which bars credit discrimination based in part on race or ethnicity.

Under the settlement, PayPal will launch a new program for veteran-owned small businesses or those in farming, manufacturing, or technology. The company admits to no wrongdoing and will not pay a separate fine to the federal government. Acting Attorney General Todd Blanche said the settlement reflected broader enforcement priorities.

“This Department of Justice is delivering on President Trump’s vow to root out illegal DEI from every corner of corporate America,” he stated. The agreement comes one month after IBM agreed to pay $17 million in damages to the DOJ over its DEI programming. IBM did not admit to any wrongdoing in that settlement either.

Taylor Watson, a PayPal spokesperson, highlighted the company’s long record of supporting small businesses. “For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools,” Watson said.

” David Glasgow, co-founder of the Meltzer Center for Diversity, Inclusion and Belonging at New York University School of Law, told HR Brew that the PayPal and IBM cases are linked.

He said the current administration has signaled it will examine corporate actions from 2020, the heyday of many DEI efforts, even if organizations have since changed course. com reported that the PayPal settlement was originally published by HR Brew.

The report noted that despite the Trump administration’s claims, diversity, equity, inclusion and belonging initiatives remain widespread in corporate America, often under different names.

U.S. policy officials, top founders, and thought leaders to help define what’s next for the American economy on Nov. 16-17 in Detroit.