PayPal Agrees to Settle US Probe of DEI Business Initiative

PayPal Holdings Inc. has agreed to resolve a U.S. Justice Department probe into allegations the company had violated federal civil rights laws when it started an initiative to support minority-owned businesses.

Under terms of the settlement, PayPal agreed to forgo about $30 million in processing fees from about $1 billion of transactions. The payment platform also plans to start a small business initiative, which would include fee waivers for veterans and businesses engaged in farming manufacturing or technology, according to the settlement agreement.

PayPal had announced the Economic Opportunity Fund to invest in black and minority-owned businesses in 2020 following the killing of George Floyd.

Acting U.S. Attorney General Todd Blanche said the settlement is an example of President Donald Trump’s focus on eliminating programs in corporate America seen as promoting illegal diversity, equity, and inclusion initiatives.

The government indicated PayPal’s previous actions were a potential violation of the Equal Opportunity Act. PayPal didn’t admit to any wrongdoing under the agreement, and the government didn’t make any findings regarding violations of federal law.

A PayPal spokesperson said the company would be launching the small business initiative “to infuse American small businesses with even more economic opportunity.” The Wall Street Journal reported earlier on the settlement.

Top photo: The PayPal application in the Apple App Store on a smartphone arranged in Saint Thomas, U.S. Virgin Islands, on Saturday, Jan. 29, 2022. Photographer: Gabby Jones/Bloomberg.