Today, the Justice Department announced a settlement with PayPal Inc. to resolve a fair lending investigation into a discriminatory investment program created for black and minority-owned businesses.

The settlement requires PayPal to launch a new Small Business Initiative that excludes criteria based on race, national origin, or other protected characteristics. As part of the initiative, PayPal will waive processing fees for $1 billion of transactions – a value of approximately $30 million – for eligible American small businesses that are veteran-owned or engaged in farming, manufacturing, or technology.

In addition to fee waivers, as part of the settlement PayPal will designate a director of the Small Business Initiative, conduct an assessment of the needs of American small businesses and determine how PayPal can best support them, submit plans and proposals for the initiative to the United States, provide training to employees on the Equal Credit Opportunity Act, and report on the initiative annually.

PayPal announced the discriminatory Economic Opportunity Fund in 2020 to invest in black and minority-owned businesses. While the program gave a preference to businesses based on race, color, and national origin, it was not implemented to remediate any specific instances of past discrimination.