The Justice Department has secured a $30 million settlement from PayPal, ending a federal investigation into its 2020 Economic Opportunity Fund. The program, which the Department of Justice alleged gave preferences to businesses based on race, color, and national origin without any documented basis in remedying specific past discrimination, must be scrapped and replaced with a new Small Business Initiative built entirely on race-neutral criteria.

The settlement does not constitute a finding that PayPal violated the Equal Credit Opportunity Act or any federal law. However, PayPal admitted no wrongdoing and agreed to waive processing fees for $1 billion in transactions for eligible American small businesses, including veteran-owned companies and those engaged in farming, manufacturing, or technology.

Acting Attorney General Todd Blanche stated the move fulfills President Trump’s promise to root out illegal diversity initiatives in corporate America. Assistant Attorney General Harmeet Dhillon emphasized that race and national origin should play no role in determining which small businesses receive financial support.

PayPal launched a $530 million Economic Opportunity Fund in 2020 targeting Black and underrepresented minority businesses. The Department of Justice investigated whether the program violated the Equal Credit Opportunity Act by providing benefits based on race without addressing specific past discrimination.

Under the settlement, PayPal must establish a new Small Business Initiative with eligibility criteria that exclude race, national origin, or other protected traits. Additional requirements include designating a director for the initiative, assessing small-business needs, submitting plans to the government, training employees on Equal Credit Opportunity Act compliance, and reporting annually.

The Department of Justice reserved its right to pursue future enforcement actions against PayPal if later violations occur.