DOJ Settles PayPal Probe on Race-Eligible Fund

The U.S. Department of Justice announced a settlement with PayPal on Tuesday resolving a federal investigation into the company's 2020 Economic Opportunity Fund, a program that pledged $530 million to support Black- and minority-owned small businesses.

Under the agreement, PayPal will launch a new Small Business Initiative and waive approximately $30 million in processing fees on $1 billion worth of transactions for eligible U.S. small businesses. The benefits will target veteran-owned companies or those operating in farming, manufacturing, or technology sectors, without eligibility criteria based on race or national origin. PayPal will also appoint a dedicated director for the program, provide Equal Credit Opportunity Act training to relevant employees, conduct a nationwide assessment of small-business financial needs, and submit annual reports to the Justice Department.

The investigation examined whether the original fund's use of race and national origin in determining eligibility violated the Equal Credit Opportunity Act, a 1974 law that prohibits creditors from discriminating on those bases. The settlement includes no admission of wrongdoing by PayPal, and the Justice...