The Department of Justice announced May 12, 2026, that PayPal Inc. agreed to pay $30 million to resolve a federal fair lending investigation into a DEI investment program the department alleged discriminated against businesses on the basis of race and national origin [1]. The settlement resolves DOJ scrutiny of a PayPal initiative that had directed capital and resources to Black and minority-owned businesses to the exclusion of others [1][2].
The department characterized the program as a violation of the Equal Credit Opportunity Act, which bars creditors from discriminating against applicants on the basis of race or national origin, among other protected classes [1]. The Civil Rights Division led the investigation under Assistant Attorney General Harmeet K. Dhillon and Deputy Attorney General Todd Blanche [2]. The action follows a series of Trump administration directives ordering federal agencies to identify and challenge corporate DEI programs that condition business benefits on race-based criteria [1].
Under the consent agreement, PayPal must establish a new Small Business Initiative open to qualifying American small businesses without regard to race or national origin [1]. The company must also waive processing fees on up to $1 billion in transactions for businesses that participate in the new program [1]. The $30 million payment represents a direct financial penalty tied to the original program's operation [1][2]. PayPal did not admit wrongdoing as part of the resolution [1].
The settlement positions the administration's Civil Rights Division as an active enforcement actor against private-sector DEI structures, extending beyond the executive branch's internal rollback of its own diversity programs. Additional corporate DEI initiatives remain under review across federal agencies, and legal observers expect further enforcement actions targeting race-conscious lending, contracting, and investment programs at financial institutions and technology companies. The PayPal resolution offers a template, a monetary penalty combined with a race-neutral successor program, that the department may replicate in future cases.