finance
PayPal Agrees to End Race-Based 2020 Lending Program, Redirect Support to Veterans and Key Industries in DOJ Settlement
PayPal will waive $30 million in processing fees for $1 billion in small business transactions under a settlement signed May 12 that resolves a DOJ probe into its 2020 initiative guaranteeing $530 million for Black and minority-owned businesses. The agreement requires no admission of wrongdoing or separate fine from PayPal. It follows a similar $17 million settlement with IBM one month earlier.
May 14, 3:26 PM·2m read1 source
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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.
