PayPal rewrites its history of politically motivated debanking as it seeks FDIC approval for bank
he digital payments company whose founders and former employees are so influential they are known as a "mafia," among them President Trump's allies Peter Thiel and Elon Musk, has new ambitions.
But one of its ambitions, becoming a bank, faces a significant hurdle: more than a decade of account freezes, suspensions and terminations seemingly based on viewpoint rather than fraud or misrepresentation, especially in the early years of the COVID-19 pandemic.
PayPal implemented new policies this week intended to convince the Federal Deposit Insurance Corp. to insure PayPal Bank, its proposed Utah-chartered "industrial loan company," but it appears to have misrepresented how it used at least one policy it just changed.
The company's Sept. 15 letter to the FDIC – updating its March 16 letter with "additional steps PayPal will take as part of its continuing commitment to serving customers fairly and consistently" – claims its user agreement's longtime prohibition on "false, inaccurate or misleading information" has never applied beyond "conduct in the payments relationship."
The claim appears to flatly contradict its record of punishments doled out to customers across the ideological spectrum, from conservative Moms for Liberty to left-leaning Consortium News. Both were targets of the censorship-industrial complex during the Biden administration, whose Treasury Department went so far as tacitly endorsing politically motivated debanking.
The Alliance Defending Freedom made public PayPal's Sept. 15 letter in announcing Thursday the conservative legal powerhouse was dropping its opposition to PayPal's FDIC bid, now that PayPal has "added protection against unfairly debanking customers based on their religious and political viewpoints or affiliations" as of Nov. 4.
Its new commitments "are an important step toward preventing the unfair debanking of its customers" and should be echoed broadly within the financial services and banking sectors, especially replacing "subjective terms like ‘hate’ and ‘misinformation’ with clear, objective standards that protect their customers," ADF senior counsel Jeremy Tedesco said.
ADF has fought a public war against politically motivated debanking for years, allied with House Republicans including Judiciary Committee Chairman Rep. Jim Jordan, R-Ohio, a candidate for House minority leader after the GOP's midterm bloodbath. It represented a Christian international mission against Bank of America, arguing the cutoff violated Tennessee law.
PayPal reversed some of its higher-profile account terminations in 2022, against the U.K. Free Speech Union, its founder Toby Young and his Daily Sceptic news outlet, two weeks after an international outcry that included members of U.K. Parliament.
In that case, it based the deplatforming on violating the "acceptable use policy," reportedly for spreading COVID vaccine "misinformation" and protesting lockdowns.
Weeks later, PayPal debuted and even more quickly reversed an AUP that would allow it to fine users $2,500 for "promoting misinformation" or "objectionable" content – even encouraging users to rat out supposed scofflaws – claiming the information was "incorrect" and "never intended to be inserted in our policy."
Just the News could not find a public record of PayPal's correspondence with the FDIC, including the March 16 letter mentioned in the Sept. 15 letter, and the company didn't answer queries. The FDIC website simply says PayPal's application was "accepted" June 9 but action remains "pending."
FDIC spokesperson Brian Sullivan told Just the News "we traditionally decline to comment on correspondence we receive," even if it raises red flags like the discrepancy between PayPal's portrayal of its former user agreement and actions it took against customers.
PayPal is a relative latecomer to changing its policies, according to ADF.
"Most of the nation’s largest banks made similar policy changes in the last few years," ADF said, citing the Office of the Comptroller of the Currency's report last month on "irrefutable evidence that the nation’s largest banks have denied, debanked and discriminated against customers and lawful businesses," in the words of Comptroller Jonathan Gould.