PayPal (PYPL) Will Fork Over $30 Million to DOJ Over Illegal DEI Practices

Global payment giant PayPal (PYPL) has agreed to pay a $30 million settlement to the U.S. Department of Justice (DOJ) over claims of illegal DEI practices in a past small-business support program. The case focused on how the program was managed and whether access was fair for all groups. Concerns were raised around equal access to funding for diversity-based support. As a result, the company is now changing how it helps support small businesses.Claim 55% Off TipRanksUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks DOJ Settlement Resolves PayPal Case On May 12, PayPal reached a $30 million settlement with the U.S. DOJ. The case was tied to a past business support and investment program that raised concerns around DEI-related funding practices. The review focused on whether access to funding was fair, but the payment company did not admit any wrongdoing as part of the settlement. Earlier, in 2020, PayPal's program was aimed at helping businesses that are less represented. As part of its support program, the payment giant launched a one-time $530 million Economic Opportunity Fund to expand access for minority-owned businesses. However, the DOJ reviewed the program under the Equal Credit Opportunity Act (ECOA), which bars discrimination in credit decisions. The DOJ stressed the need for equal access to business support programs. Assistant Attorney General Harmeet K. Dhillon of the DOJ Civil Rights Division also backed the decision. She said race and national origin should not determine access to support. She added that the enforcement aims to stop any form of bias in corporate systems. PayPal Launches New Small Business Initiative After the settlement, PayPal launched a new small business initiative focused on U.S. firms. The program builds on over two decades of experience helping small businesses with digital financial tools. It also aims to give broader access and include more people in support programs. PayPal is also revising its business support strategy after the latest regulatory review. The payment giant will expand access through updated services and adopt a new approach to small-business growth. This will include waiving processing fees on $1 billion in transactions for select U.S. businesses, including veteran-owned, farming, manufacturing, and tech firms. Is PayPal Still a Good Buy? According to TipRanks analyst consensus data, PayPal (PYPL) is rated a Hold. The projected 12-month average price target of the payment stock is around $49, implying about 8.9% upside from current levels. Out of 27 Wall Street analysts, 3 rate it a Buy, 21 a Hold, and 3 a Sell. These ratings signal cautious sentiment among analysts and investors as they watch PayPal's growth outlook. For more information on this stock, investors can track PYPL's ratings and performance on the TipRanks Stocks Comparison Center.