The U.S. Department of Justice has announced a settlement with PayPal Inc. to resolve a fair lending investigation into its 2020 Economic Opportunity Fund, an investment program for black and minority-owned businesses. Under the settlement, PayPal must launch a new Small Business Initiative that does not use race, national origin, or other protected characteristics as eligibility criteria. The initiative will waive processing fees on USD 1 billion of transactions, worth about USD 30 million, for eligible U.S. small businesses that are veteran-owned or operate in farming, manufacturing, or technology. PayPal must also appoint a director for the initiative, assess the needs of American small businesses and how PayPal can support them, submit plans and proposals to the United States, provide employee training on the Equal Credit Opportunity Act, and report on the initiative annually. The department said the earlier program gave preferences based on race, color, and national origin and was not implemented to remedy specific instances of past discrimination.
U.S. Department of Justice 2026-05-12
U.S. Department of Justice settles fair lending investigation with PayPal and requires race neutral USD 1 billion small business initiative
The U.S. Department of Justice reached a settlement with PayPal Inc. over a fair lending investigation into its 2020 Economic Opportunity Fund, which allegedly gave preferences based on race, color, and national origin. PayPal must establish a new Small Business Initiative that excludes protected characteristics from eligibility criteria, waive processing fees on USD 1 billion of transactions for eligible U.S. small businesses, appoint a director for the initiative, enhance Equal Credit Opportunity Act training, and provide annual reports to the United States.