PayPal Settles With Trump’s Justice Department for $30 Million Over Allegedly ‘Unlawful DEI’ Initiative

AP Photo/Jeff Chiu, File

President Donald Trump’s Department of Justice announced on Tuesday that PayPal had agreed to a $30 million settlement over an “unlawful DEI” initiative at the company which discriminated based on race.

“Today, the Justice Department announced a settlement with PayPal Inc. to resolve a fair lending investigation into a discriminatory investment program created for black and minority-owned businesses,” Trump’s DOJ announced in a press release:

The settlement requires PayPal to launch a new Small Business Initiative that excludes criteria based on race, national origin, or other protected characteristics. As part of the initiative, PayPal will waive processing fees for $1 billion of transactions – a value of approximately $30 million – for eligible American small businesses that are veteran-owned or engaged in farming, manufacturing, or technology.

…

In addition to fee waivers, as part of the settlement PayPal will designate a director of the Small Business Initiative, conduct an assessment of the needs of American small businesses and determine how PayPal can best support them, submit plans and proposals for the initiative to the United States, provide training to employees on the Equal Credit Opportunity Act, and report on the initiative annually.

Notably, the agreement between the two parties stipulates that “The United States has not made any determinations or findings regarding PayPal violating ECOA or any other federal law,” and that it “is not an admission or finding in whole or in part by either party, and PayPal expressly denies any liability related to the economic opportunity fund.”

The Department of Justice launched an investigation into the payment services company after it launched a fund in 2020 “to invest in black and minority-owned businesses,” which in practice “gave a preference to businesses based on race, color, and national origin,” the press release said.

In a statement, Acting U.S. Attorney General Todd Blanche boasted that the Department of Justice was “delivering on President Trump’s vow to root out illegal DEI from every corner of corporate America.”

“American corporations are on notice,” he warned. “You will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans.”

Assistant Attorney General Harmeet Dhillon also warned companies that they would be prosecuted with “the full range” of the law if found to be discriminating against Americans based on race or national origin.

“With this settlement, PayPal agrees that race and national origin should play no part in determining which small businesses deserve its investment and financial support,” she said. “The Department will use the full range of its enforcement authorities to eliminate discrimination and ensure that all Americans have an equal opportunity to grow their small businesses.”

PayPal released a statement in response to the settlement that read: “For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools. We’re excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity.”

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