Payment giant PayPal has reached a settlement with the U.S. Department of Justice (DOJ), agreeing to forfeit approximately $30 million in transaction fees to end an investigation into its 2020 minority business support program. The DOJ alleged the program prioritized certain ethnic groups and excluded Asian applicants, violating federal civil rights laws.
$530M Program Under Fire
Following the George Floyd incident in 2020, PayPal launched a $530 million initiative to support businesses and communities owned by Black and other minorities. However, the DEI program quickly drew 'reverse discrimination' accusations. Lawsuits claimed PayPal gave preference to Black and Latino fund managers while shutting out Asian applicants.
The DOJ investigated, finding that the program may have violated the Federal Civil Rights Act, which bars creditors from discriminating based on race. In the settlement, PayPal is not paying a fine but will forgo collecting about $30 million in transaction fees in exchange for the DOJ dropping the probe.