IN THIS ISSUE

EXECUTIVE ORDERS & FEDERAL POLICY

PayPal Settles DOJ DEI Probe for $30M

• PayPal to waive $30 million in fees to settle DOJ probe of minority business program

On May 12, 2026, the U.S. Department of Justice announced a settlement with PayPal Inc. resolving a fair lending investigation into the company’s Economic Opportunity Fund, a program launched in 2020 to support Black and minority-owned businesses.

The DOJ stated that the program used race-, color-, and national origin-based eligibility criteria in ways that raised concerns under the Equal Credit Opportunity Act. The Department also stated that the program was not tied to remediation of specific documented instances of past discrimination.

Under the agreement, PayPal will launch a new Small Business Initiative using race- and ethnicity-neutral eligibility criteria, waive processing fees on approximately $1 billion in transactions valued at roughly $30 million, provide ECOA training to employees, and submit annual reports to the government.

The settlement includes no admission of wrongdoing, and the DOJ stated that it made no findings that PayPal violated the ECOA or any other federal law.

WORKFORCE & EMPLOYMENT

EEOC Files Suit Against the New York Times

• EEOC sues New York Times, alleging it discriminated against White male employee

OVERVIEW

On May 5, 2026, the U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit against The New York Times Company in the U.S. District Court for the Southern District of New York, alleging that the company violated Title VII of the Civil Rights Act of 1964 by denying a white male editor a promotion because of his race and/or sex.

The lawsuit centers on a 2025 hiring process for a deputy real estate editor role. According to the complaint, the employee, who had prior experience in real estate coverage and senior editorial positions at the company, was not advanced to the final stage of the process. The position was ultimately filled by a multiracial woman.

The EEOC alleges that race and sex were factors in the promotion decision and cites the company’s public DEI commitments, including its 2021 “Call to Action,” as evidence supporting its claims. EEOC Chair Andrea Lucas stated that Title VII prohibits employment decisions based on race or sex and said the agency’s action reflects its obligation to enforce federal anti-discrimination law.

The lawsuit was filed directly by the EEOC rather than by the employee and seeks injunctive relief, back pay, compensatory damages, and punitive damages. EEOC Commissioner Kalpana Kotagal publicly dissented from the agency’s decision to pursue the litigation.

The New York Times denied the allegations and described the lawsuit as politically motivated, stating that the selected candidate was the most qualified applicant for the position.

LEGAL INTERPRETATION

Title VII of the Civil Rights Act of 1964 prohibits employers from making hiring or promotion decisions based on race or sex. The statute applies equally to all employees regardless of demographic background, and the EEOC has authority to file suit directly in federal court following its administrative process.

The EEOC’s complaint against The New York Times is framed as a disparate treatment case tied to a specific promotion decision rather than a direct challenge to the company’s DEI policies themselves. According to the complaint, the agency alleges that race and sex were motivating factors in the selection process for a deputy real estate editor position.

A legally significant aspect of the case is the EEOC’s reliance on the company’s public DEI commitments, including its 2021 “Call to Action,” as circumstantial evidence of alleged race- and sex-conscious decision-making. Courts have historically permitted statements, policies, and internal communications to be introduced as evidence when assessing whether discriminatory intent may have influenced an employment action. However, public diversity commitments alone are generally insufficient to establish liability absent evidence connecting those statements to a specific employment decision.

The case also reflects the EEOC’s current enforcement posture under Chair Andrea Lucas, which has placed increased scrutiny on workplace practices, hiring processes, and corporate statements involving race- or sex-conscious decision-making. While Title VII itself has not changed, the agency’s interpretation and enforcement priorities continue to evolve under the current administration.

BRIDGE POV

The EEOC’s lawsuit against The New York Times relies heavily on the company’s public commitments to increasing representation and leadership diversity as circumstantial evidence of discriminatory intent. That distinction matters.

Federal law continues to permit employers to pursue a wide range of lawful inclusion efforts, including broadening candidate pools, expanding outreach, increasing access to opportunity, and setting aspirational diversity goals. Those efforts, standing alone, are not prohibited by Title VII.

The central legal question is not whether an organization values diversity, but whether a specific employment decision was made because of race or sex.

Allegations of discrimination must ultimately be proven with evidence tied to the employment action itself, not assumed based solely on the existence of DEI commitments or public statements about representation.

ACTIONABLE STRATEGIES

1. Separate Aspirational Goals from Employment Decisions: Ensure diversity commitments and representation goals remain clearly distinct from the criteria used in hiring, promotion, and compensation decisions. Employment actions should consistently be tied to documented qualifications, experience, performance, and business-related factors.
   
   
2. Reevaluate How Inclusion Efforts Are Communicated: Review public statements, internal messaging, workforce reports, and leadership communications through both a legal and governance lens. As enforcement scrutiny increases, organizations should assume these materials may be examined alongside individual employment decisions.
   
   

3. Reinforce Consistency and Documentation Across Talent Practices: Standardize hiring and promotion processes across teams and functions to reduce inconsistency and ambiguity. Clear evaluation criteria, documented decision-making, and aligned oversight between Legal, HR, and leadership teams remain essential safeguards in the current environment.

See also: Federal Enforcement Campaign Targets Corporate DEI as Legal Standards Remain Unchanged (Issue 46); Recap from BRIDGE26: Mitigate Risk. Lead with Clarity (Issue 63)

EXECUTIVE ORDERS & FEDERAL POLICY

ABC Contests FCC's Authority Over Broadcast Content

• ABC argues Trump administration is trying to chill free speech

OVERVIEW

On May 9, 2026, ABC’s Houston affiliate, KTRK-TV, filed a petition with the Federal Communications Commission challenging the agency’s authority to revisit a 2002 ruling classifying “The View” as a bona fide news interview program exempt from federal equal time requirements.

The dispute began after the FCC opened an inquiry in February 2026 related to a Texas Senate candidate’s appearance on the program. In March, the agency requested additional records and documentation tied to the broadcast. ABC stated that it submitted approximately 4,839 pages of supplemental materials to the FCC on April 21, 2026.

The petition, filed by attorney and former U.S. Solicitor General Paul Clement, challenges the FCC’s authority to revisit the program’s long-standing exemption status and disputes the agency’s interpretation of federal equal time requirements.

The petition also challenges the FCC’s decision to require early license renewal applications for ABC’s eight owned-and-operated television stations. FCC Chair Brendan Carr has publicly questioned whether “The View” should continue to qualify for the bona fide news exemption.

The FCC stated that it would review the matter and defended the equal time law as a measure intended to support voter access to information during elections. FCC Commissioner Anna Gomez, the commission’s sole Democratic member, publicly supported ABC’s decision to challenge the agency’s actions.

LEGAL INTERPRETATION

The dispute between ABC and the FCC centers on the scope of the agency’s authority under the Communications Act and the constitutional limits imposed by the First Amendment. At issue is whether the FCC may revisit long-standing determinations regarding what qualifies as a bona fide news interview program under federal equal time rules.

Section 315 of the Communications Act generally requires broadcasters that provide airtime to legally qualified political candidates to offer equal opportunities to opposing candidates. However, the statute contains longstanding exemptions for bona fide news programming, including news interviews, documentaries, and on-the-spot coverage of news events. Those exemptions have historically been interpreted broadly by the FCC. In 2002, the Commission determined that “The View” qualified for the news interview exemption.

ABC’s petition argues that the FCC’s current inquiry departs from decades of settled broadcast practice and exceeds the agency’s authority. The filing further contends that increased regulatory scrutiny tied to editorial and programming decisions could create a chilling effect on protected speech and political coverage.

The matter also raises broader questions regarding the extent to which federal regulators may scrutinize newsroom judgment and editorial classifications without infringing on constitutional protections. While broadcasters operate within a regulated licensing framework, courts have historically recognized significant First Amendment protections for editorial decision-making and political speech.

The case reflects a broader tension between federal oversight of broadcast license holders and constitutional protections governing press freedom and expressive activity.

BRIDGE POV

ABC’s challenge to the FCC raises significant concerns about government overreach and the use of regulatory authority in ways that could threaten protected speech and institutional independence. The core issue is not whether broadcasters are subject to regulation. It is whether federal agencies can use that authority to revisit long-settled standards in ways that place pressure on editorial judgment and political programming.

The First Amendment and the preservation of an independent press are foundational to democratic governance. Efforts that blur the line between lawful oversight and political retaliation risk undermining those protections and creating a chilling effect that extends beyond the media industry itself.

ABC’s position reinforces the importance of defending organizational autonomy, constitutional protections, and the principle that disagreement with speech or viewpoints is not, by itself, a justification for regulatory action.

ACTIONABLE STRATEGIES

1. Assert Institutional Autonomy When Regulatory Authority Expands Beyond Established Boundaries: Organizations should be prepared to challenge or seek clarification when government agencies attempt to extend oversight into areas tied to protected speech, editorial discretion, or long-standing institutional practices.
   
   

2. Strengthen Governance Around Public-Facing and Editorial Decision-Making: Ensure clear internal processes exist for communications, programming, public positioning, and reputational risk management. Leadership alignment across Legal, Communications, and executive teams is essential in politically charged environments.
   
   

3. Prepare for Increased Regulatory and Constitutional Challenges: Companies operating in regulated industries should assess where evolving enforcement priorities may create tension between compliance obligations, institutional independence, and constitutional protections.

See also: Trump Issued an Executive Order on Disparate Impact Liability (Issue 10); Trump Issues Executive Order on the Use of DEI in AI (Issue 23); AI Bias Is Becoming the Next Civil Rights Battleground as Democrats and States Move to Fill the Federal Void (Issue 43)

CIVIL RIGHTS

CFPB Moves to Eliminate Disparate Impact Standards From Fair Lending Enforcement

• CFPB submits status report urging EEOC to revise framework to align with executive orders

OVERVIEW

On April 22, 2026, the Consumer Financial Protection Bureau issued a final rule amending Regulation B, which implements the Equal Credit Opportunity Act. The rule removes disparate impact language from Regulation B, marking a significant shift in federal fair lending enforcement.

The rule also amends provisions related to creditor discouragement and special purpose credit programs. Under the revised rule, the CFPB narrows the discouragement standard and limits the use of race, national origin, or sex as eligibility criteria in certain special purpose credit programs.

The CFPB stated that the amendments clarify obligations under ECOA and reflect the agency’s interpretation that the statute does not authorize disparate impact liability. For decades, federal regulators have used disparate impact analysis to examine lending practices that may disproportionately affect protected groups even absent evidence of intentional discrimination.

The rule is scheduled to take effect on July 21, 2026.

LEGAL INTERPRETATION

The CFPB’s amendments to Regulation B represent a significant shift in the federal government’s interpretation of fair lending enforcement under the Equal Credit Opportunity Act (ECOA). For decades, Regulation B recognized multiple theories of discrimination enforcement, including disparate treatment and disparate impact, allowing regulators to examine lending practices that may disproportionately affect protected groups even absent evidence of intentional discrimination.

By removing disparate impact language from Regulation B, the CFPB is signaling that it no longer interprets ECOA as authorizing liability based solely on discriminatory effects. Instead, the agency’s revised approach places greater emphasis on intentional discrimination and explicit differential treatment.

The rule also narrows provisions related to creditor discouragement and revises standards governing certain special purpose credit programs. These changes align with broader efforts across the administration to limit the use of disparate impact frameworks in federal civil rights enforcement and compliance oversight.

Importantly, the CFPB’s rule does not amend ECOA itself, which can only be changed by Congress. Federal courts may still ultimately determine whether disparate impact claims remain legally viable under the statute regardless of the agency’s interpretation. In addition, state fair lending laws and enforcement standards may continue to apply independently of the CFPB’s revised federal framework.

BRIDGE POV

The CFPB’s decision to remove disparate impact language from Regulation B represents a fundamental shift in how discrimination is identified and enforced within the financial system. Disparate impact has long functioned as a critical civil rights framework precisely because discrimination is not always explicit, intentional, or easily visible on its face.

The practical effect of this change is significant. It narrows one of the primary frameworks historically used to challenge lending practices that may systematically disadvantage protected groups through algorithms, underwriting models, pricing structures, or other policies that produce unequal outcomes without overt discriminatory intent.

Framing this rollback as a matter of fairness ignores the historical reason disparate impact standards exist in the first place: to identify patterns of exclusion that traditional intent-based standards often fail to capture. This is not simply a technical regulatory revision. It reflects a broader ideological effort to narrow the scope of civil rights enforcement across federal agencies.

ACTIONABLE STRATEGIES

1. Maintain Internal Fair Lending Reviews Regardless of Federal Enforcement Changes: Financial institutions should continue monitoring for disparate outcomes across lending, underwriting, pricing, and algorithmic decision-making systems even as federal enforcement standards shift.
   
   
2. Assess Exposure Across State and Multi-Jurisdictional Requirements: State fair lending laws, attorney general enforcement actions, and private litigation risks may continue applying disparate impact standards independent of the CFPB’s revised position.
   
   
3. Strengthen Governance Around AI and Automated Decision-Making: As reliance on predictive models and algorithmic systems increases, organizations should reinforce oversight, testing, and documentation practices to identify unintended disparities and protect against long-term legal and reputational risk.

See also: Trump Issued an Executive Order on Disparate Impact Liability (Issue 10); Fair Lending Protections Under Attack as CFPB Rules Face Challenge (Issue 47)