PayPal agrees to $30 million settlement with the Department of Justice

PayPal will waive $30 million in processing fees for $1 billion in small business transactions as part of a new settlement with the Department of Justice (DOJ) signed on May 12.

The settlement resolves a DOJ investigation into PayPal over a 2020 program that guaranteed a $530 million investment for Black and minority-owned businesses. The government claimed that the 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. However, 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. Despite the Trump administration’s claims, HR Brew has found that diversity, equity, inclusion, and belonging initiatives are still widespread throughout corporate America, even if they go by a different name.

“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 of the settlement in a statement via email. “We’re excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity.”

The agreement comes just one month after IBM agreed to pay $17 million in damages to the DOJ over its DEI programming, HR Brew reported previously. Similarly, IBM did not admit to any wrongdoing and the government took the settlement as a victory against DEI.

While the PayPal settlement is different from that with IBM, 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 two are linked.

“This administration has clearly signaled that it’s not just going to look at what organizations are doing now, or what they’ve done recently, since the anti-DEI crackdown,” he said. “They appear quite willing to say, ‘No, actually, we’re going to peek behind the curtain and look at what you were doing in the heyday of 2020, relating to DEI. And if you were doing anything that we considered to be unlawful back then, then we may come after you as well.’”