The United States has secured a $30 million settlement with PayPal over a pro-black and minority-owned investment programme that President Donald Trump’s administration considers unlawful and discriminatory. 

The U.S. Justice Department on Tuesday announced the settlement with PayPal Inc. to resolve a fair lending investigation into what it described as a discriminatory investment programme 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 on $1 billion in transactions – approximately $30 million in value – for eligible American small businesses that are veteran-owned or engaged in farming, manufacturing, or technology.

In addition to the 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 the company can best support them.

The company is also required to submit plans and proposals for the initiative to the U.S. government, provide employees with training on the Equal Credit Opportunity Act, and report annually on the initiative.

PayPal announced the Economic Opportunity Fund in 2020 to invest in black and minority-owned businesses. 

While the programme gave preference to businesses based on race, colour, and national origin, Mr Trump’s administration said it was not intended to remedy any specific instances of past discrimination, thereby describing it as discriminatory.

Speaking on the settlement, U.S. acting Attorney General Todd Blanche said the Department of Justice is delivering on President Trump’s vow to root out illegal diversity, equity and inclusion (DEI) from every corner of corporate America.

He added that American corporations are on notice, and violators will face aggressive enforcement if they use race or national origin to discriminate against qualified Americans.

Also, Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division noted that with the 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,” he added.

The Justice Department claimed that the U.S. Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants based on race, colour, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance programme, or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act.