PayPal has agreed to forgo approximately $30 million in transaction fees to resolve a U.S. Justice Department investigation into whether the financial services company unlawfully favored minority-owned businesses through a funding initiative launched in 2020, The Wall Street Journal reported Tuesday.

Federal investigators had been examining whether PayPal violated a civil rights law that bars creditors from discriminating against applicants based on race. The probe focused on the company’s $530 million plan to support Black and minority-owned businesses, which PayPal created shortly after the police killing of George Floyd touched off a national debate over racial inequality, the WSJ said.

The settlement requires PayPal to waive processing fees on $1 billion of transactions, worth roughly $30 million, for small businesses owned by veterans and for companies in farming, manufacturing, or technology, Justice Department officials said in remarks cited by the Journal. PayPal did not admit wrongdoing as part of the agreement, the report said, and the company said in a statement that it was excited “to infuse American small businesses with even more economic opportunity.”

The settlement comes as part of a broader Trump administration campaign to dismantle corporate diversity, equity, and inclusion (DEI) initiatives across corporate America. Last month, IBM agreed to pay $17 million to resolve allegations by Trump officials that its DEI policies discriminated against employees and job applicants. 

The Justice Department is pursuing a series of civil investigations under the False Claims Act, advancing the theory that holding a federal contract while continuing to weigh diversity in hiring amounts to fraud against the government and entitles it to recover potentially millions of dollars, according to the report. 

PayPal is also facing separate private litigation over its funding program for minority startups, the Journal reported. An Asian American venture-capital investor sued the company in January 2025, accusing it of illegal discrimination by earmarking investments for Black- and Latino-owned operations.