PayPal Reaches Settlement With DOJ Over 2020 Program Targeting Minority-Owned Businesses
PayPal signed a settlement with the Department of Justice on May 12 resolving an investigation into its 2020 program guaranteeing $530 million for Black and minority-owned businesses. The company will waive $30 million in processing fees for $1 billion in small business transactions and launch a new initiative for veteran-owned businesses and those in farming, manufacturing or technology.
westernjournal.comPayPal will waive $30 million in processing fees for $1 billion in small business transactions under a settlement with the Department of Justice signed on May 12. The settlement resolves a DOJ investigation into a 2020 program by PayPal that guaranteed a $530 million investment for Black and minority-owned businesses.
The government claimed that program was unlawful under the Equal Credit Opportunity Act, which bars credit discrimination based in part on race or ethnicity.
PayPal will launch a new program for veteran-owned small businesses or those in farming, manufacturing, or technology. The settlement stipulates that PayPal admits to no wrongdoing and will not pay a separate fine to the federal government. “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.
“For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools,” Taylor Watson, a PayPal spokesperson, said in a statement. ” 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 its settlement.
@FortuneMagazine reported that the PayPal settlement is different from the one with IBM even as both reflect the current administration’s approach to past corporate programs. The IBM case was reported previously by HR Brew. Acting Attorney General Todd Blanche’s statement framed the PayPal resolution as part of a broader effort.
PayPal’s new Small Business Initiative shifts the focus of its support to veteran-owned businesses and specific industry sectors without referencing race or ethnicity. The Equal Credit Opportunity Act violation alleged by the government centered on the 2020 program’s explicit targeting of Black and minority-owned businesses.
PayPal’s decision to forgo any admission of liability mirrors the terms accepted by IBM one month earlier.
Key Facts
Story Timeline
4 events- 2020
PayPal launched program guaranteeing $530 million investment for Black and minority-owned businesses
1 source@FortuneMagazine - 2026-04-12
IBM agreed to pay $17 million in damages to DOJ over its DEI programming without admitting wrongdoing
1 sourceHR Brew - 2026-05-12
PayPal and DOJ signed settlement resolving investigation into 2020 program
1 source@FortuneMagazine - 2026-05-15
Settlement details including fee waiver, new program, and statements released
1 source@FortuneMagazine
Potential Impact
- 01
Small businesses processing $1 billion through PayPal will save $30 million in fees
- 02
PayPal shifts focus of business support programs away from race-based criteria to veteran and sector-specific initiatives
- 03
Continues pattern of DOJ actions against past corporate DEI programs from 2020 era
Transparency Panel
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