WASHINGTON – PayPal recently updated its policies, resulting in added protection against unfairly debanking customers based on their religious and political viewpoints or affiliations. The move comes after Alliance Defending Freedom submitted a comment to the Federal Deposit Insurance Corp. in July warning that PayPal’s policies allowed it to deplatform users for “hate,” “intolerance,” and “misleading information,” among other subjective criteria that could constitute “politicized or unlawful debanking” under Executive Order 14331. The letter detailed evidence indicating that, under prior terms of service, PayPal terminated or froze customer accounts for reasons that appear to be based on those customers’ lawful political beliefs and statements.
Under its previous policy, PayPal prohibited transactions involving “the promotion of hate, violence, racial or other forms of intolerance that is discriminatory.” The revised policy drops those subjective terms and ties the prohibition to characteristics “protected under applicable law.” PayPal will also narrow its ban on “misleading information” to communications about PayPal transactions, rather than policing customers’ unrelated speech.
Most of the nation’s largest banks made similar policy changes in the last few years as revealed in Office of the Comptroller of the Currency’s recent landmark report showing that financial institutions have been utilizing vague policies to discriminate against lawful activities and viewpoints—especially religious and conservative views.
PayPal is seeking FDIC deposit insurance for PayPal Bank, a proposed Utah industrial bank. In light of PayPal’s notification to the FDIC that it is changing its policies to better respect a diverse array of customer viewpoints, and based on its understanding that PayPal’s revised policy reaches only unlawful discrimination—not lawful religious practice or speech—ADF has withdrawn its objection to the application.
“Americans should never fear that their bank or financial services provider will cancel them or deny them service because of their religious beliefs or political views,” said ADF Senior Counsel and Senior Vice President of the Counter-Censorship Task Force Jeremy Tedesco. “PayPal has a history of mixing business with politics, and its customers pay the price when they are punished for holding views the company dislikes. Its commitments are an important step toward preventing the unfair debanking of its customers, and we’ll be watching to ensure these changes are implemented and applied fairly. PayPal is an industry leader, and we hope others in the financial services and banking sectors will replace subjective terms like ‘hate’ and ‘misinformation’ with clear, objective standards that protect their customers.”
The ADF letter to the FDIC explained how PayPal used vague, subjective, and easily weaponized terms in its terms of service and other documents that could permit PayPal to unfairly debank its customers. In one example, PayPal froze the accounts of the Free Speech Union and its founder in 2022. It froze Moms for Liberty’s accounts the same year, reversing course only after a public outcry. Executive Order 14331 makes clear that Americans should not be denied financial services because of their constitutionally or statutorily protected beliefs.
“ADF commends PayPal for taking this step in the right direction and making these significant policy changes to further advance the company’s ‘commitment to fair, consistent, and objective account management,’” said ADF Senior Counsel Caleb Dalton.
PayPal also added a public statement to its FAQ page: “PayPal reviews accounts fairly and consistently, making decisions based on account activity, not a customer’s religion, race, disability, gender, sexual orientation, national origin, political affiliation, or any characteristic protected under applicable law.” The revised policies are expected to be published on or about November 4, 2026.
Alliance Defending Freedom is an alliance-building, non-profit legal organization committed to protecting religious freedom, free speech, parental rights, and the sanctity of life.
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