The DOJ secured another legal victory against corporate DEI practices last week. PayPal agreed to a settlement deal valued at $30 million. The case arose from a PayPal program that began in 2020. That program was the Economic Opportunity Fund, which invested specifically in black and minority owned businesses. The DOJ viewed this as a direct violation of the Equal Credit Opportunity Act, which prohibits discrimination in lending. The DOJ states in their press release:
“With this settlement, PayPal agrees that race and national origin should play no part in determining which small businesses deserve its investment and financial support,… The Department will use the full range of its enforcement authorities to eliminate discrimination and ensure that all Americans have an equal opportunity to grow their small businesses.”
This settlement gets the DOJ one step closer to its ultimate goal of eliminating DEI programs in private industry. So far, the DOJ’s efforts have made inroads among government contractors and government-funded institutions. The PayPal settlement marks the first effective enforcement against a company outside the government’s direct sphere of influence. Rather than have PayPal pay the DOJ $30 million in restitution, the settlement requires PayPal to make a new small business loan program. This program will waive fees for certain transactions involving small businesses that are veteran-owned or operate in the farming, manufacturing, or technology sectors.
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