Friday, 20 April 2018

North Korea drops withdrawal of U.S. forces as condition of denuclearization, South Korea's Moon says.

North Korea has dropped its long-held demand that the United States withdraw forces from South Korea in exchange for denuclearization, South Korean President Moon Jae-in said Thursday.
The United States has about 28,000 troops stationed in South Korea, a presence that has long irked North Korean leader Kim Jong Un.
However, in the burgeoning spirit of openness and diplomacy, Moon said Kim is willing to give up US troops' removal as a precondition for discussions over denuclearizing the Korean Peninsula.
    "North Korea has expressed willingness to give up its nuclear program without making (a) demand that the (US Forces Korea) forces withdraw from the Korean Peninsula," Moon said in a meeting with the press, adding that any proposed troop withdrawal would be a "condition that the US cannot accept."
    The South Korean leader, due to meet Kim next week for a historic summit in the Demilitarized Zone, the border separating the two countries, said the North was concerned about its security.
    Ahead of the talks, a hotline between the two capitals was reconnected Friday afternoon.
    "A test call between working-level officials will be made (Friday)," South Korean presidential spokesman Kim Eui-kyeom said Thursday.
    "One end of the phone line is the Blue House and the other end is North Korea's Cabinet Committee. It is not decided yet when the two heads of the state will make a call." 
    "They only talk about ending the hostile policy against North Korea, and then guarantee of their security. With that clarification, the US and North Korea have agreed to sit down at the summit," he said.
    Officials from the two Koreas will conduct rehearsals for the inter-Korean summit ahead of the meeting, Kim Eui-kyeom, spokesman for South Korea's Blue House, said on Thursday.
    According to Kim, South Korea will have two rehearsals, one on April 24 in the afternoon and one on April 26. North Korean officials will conduct one rehearsal ahead of the summit on the 27th.
    The concession comes as President Donald Trump insisted Wednesday he'd be willing to leave a highly anticipated summit meeting with Kim should it fall short of his expectations.
    "If we don't think it's going to be successful, we won't have it," Trump said. "If the meeting when I'm there isn't fruitful, I will respectfully leave the meeting." 

    Joint drills no longer an issue

    In a similar vein, Kim signaled in March that he would not oppose joint US-South Korean military exercises, which had been postponed while South Korea hosted the Winter Olympics.
    The annual war games have been a sore point for the North Korean leader, who sees them as a direct provocation to his country's security.
    A South Korean delegation that traveled to Pyongyang reported back that Kim understands Seoul's position on holding military drills with the United States.
    "Our stance on the joint military drills is that it is hard to postpone the exercises again or suspend them, and there is no justification for doing so. But Kim said that he understands the South's stance," a high-level official in South Korea's presidential office told CNN in March.
    According to the official, Kim also said he expects the joint drills to be "readjusted" once the security situation on the Korean Peninsula stabilizes.
    US military leaders have refused to put the drills on the table as a negotiating chip. 

    Rapid thaw in relations

    Kim's diplomatic skills seem to have developed rapidly since Moon, a liberal who favors a more open policy toward the North, took office in May -- and particularly since the beginning of the year.
    A conciliatory New Year's Day message from Kim swiftly saw the reconnection of a cross-border hotline, a development that led to the North's athletes and cultural ambassadors taking part in the South Korean-hosted Winter Games.
    Since February, high-level talks between Seoul and Pyongyang have occurred, leading to an unlikely invitation from the North Korean leader to Trump for a face-to-face meeting and, indirectly, Kim's first foreign visit to neighbor and ally China.
    Cultural exchanges have also warmed relations on either side of the 38th parallel, most recently with a performance by South Korean pop acts in the North Korean capital.
    Following the groundbreaking concert, South Korean Culture Minister Do Jong-hwan told CNN that Kim seemed "sincere and genuine" about wanting to improve relations with Seoul. 
    The two Korean leaders prepare to meet next week in what is seen as paving the way for the US-North Korea summit.
    This week it emerged that CIA Director Mike Pompeo, Trump's nominee for secretary of state,traveled to the North Korean capital for secret, preliminary talks ahead of the Trump-Kim meeting, which is set for late May or early June.

    'Too expensive' to delete millions of police mugshots of innocent people, minister claims. Up to 20m facial images are retained - six years after High Court ruling that the practice is unlawful because of the 'risk of stigmatisation'.

    Millions of police mugshots of innocent people cannot be deleted because it would be too expensive, a government minister has claimed – despite a High Court ruling that the practice is unlawful.
    The work would have to be “done manually” by local forces, making the costs “difficult to justify”, a committee of MPs investigating the controversy has been told.
    The Home Office has also admitted it has no idea how many people have successfully asked for their mugshots to be deleted – amid suspicions that the figure is very low. 
    The revelations were quickly attacked by Norman Lamb, the chairman of the science and technology committee, who has warned the mass retention of facial images raises “fundamental civil liberty issues”.
    They come just days after it was revealed the Home Office destroyed landing cards which could have helped Windrush arrivals prove their right to stay in the UK - allegedly to comply with data protection laws.
    “Innocent people should rightly expect that images gathered of them in relation to a crime will be removed if they are not convicted,” Mr Lamb, a Liberal Democrat, said.
    “This is increasingly important as police forces step up the use of facial recognition at high profile events – including the Notting Hill Carnivalfor the past two years.
    “It appears that the police are making-do with current systems and practices even if it results in images of innocent people being retained.”
    The Independent revealed in January that Mr Lamb’s committee was poised to launch an inquiry after running out of a patience with the government’s failure to act on the controversy. 
    It is six years since the High Court warned of the “risk of stigmatisation of those entitled to the presumption of innocence”, adding that would be particularly harmful in the cases of children.
    But the Home Office urged forces to carry on retaining the facial images, promising new laws would follow. At least 20m are stored – a staggering one third of the UK population.
    Meanwhile, a “biometrics strategy” has been delayed for five years, prompting a watchdog’s warning that the number of retained images would rocket, breaching “individual privacy”.
    Concern has grown about the database as police have developed the ability to capture images using cameras in public places, as well as of people arrested or questioned.
    At the Notting Hill carnival, and other events, officers use facial recognition software to scan the faces of revellers, despite protests that it is unlawful and institutionally racist. 
    Baroness Williams, the Home Office minister responsible for biometrics, agreed to explain in writing why mass retention is continuing, after appearing before the committee.
    Her letter, published today, states that mugshots are stored on the computer system of an arresting force before being transferred to the police national database (PND).
    It meant the images had to be deleted manually by the local force –  a “complex exercise” – unless a decision was taken to “upgrade all 43 local systems and the PND”.
    “Any weeding exercise will have significant costs and be difficult to justify given the off-setting reductions forces would be required to find in order to fund it,” Baroness Williams wrote.
    Last year, under pressure, ministers agreed that people not convicted of any offence could apply to the police to have their images deleted.
    However, a Freedom of Information request in 2017 found few requests for custody image removals had been received - and that a third of those were rejected.
    In her letter, the minister revealed the Home Office was scrambling to compile accurate figures from individual forces.
    Mr Lamb vowed his committee would continue investigating, adding: “There is also an issue about whether some individuals even know that their image is on police databases in the first place.”
    Many DNA and fingerprint records have been deleted under legislation brought in by the Coalition government which promised to “roll back the database state”.
    Ministers have argued mugshots are “less intrusive”, because people’s faces are on public display any way - but the independent biometrics commissioner dismissed the claim.

    The UK Refused To Raid A Company Suspected Of Money Laundering, Citing Its Tory/Conservative Party Donations

    The British government refused to assist a French investigation into suspected money laundering and tax fraud by the UK telecoms giant Lycamobile – citing the fact that the company is the “biggest corporate donor to the Conservative party” and gives money to a trust founded by Prince Charles.
    French prosecutors launched a major probe into the firm and arrested 19 people accused of using its accounts to launder money from organised criminal networks two years ago, after BuzzFeed News revealed its suspicious financial activities in the UK. But the Conservatives continued taking Lycamobile’s money – and it can now be revealed that the British authorities stonewalled a formal request from French prosecutors to carry out raids in London as part of the ongoing investigation.
    Confidential correspondence between British government officials and their French counterparts, shown to BuzzFeed News by a source in the UK, reveals that the French wanted British authorities to raid Lycamobile’s London headquarters last year and seize evidence as part of their investigation into money laundering and tax fraud by the company.
    In an official response dated 30 March 2017, a government official noted that Lycamobile is “a large multinational company” with “vast assets at their disposal” and would be “extremely unlikely to agree to having their premises searched”.
    The letter, from the team at HMRC that handles law enforcement requests from foreign governments, continued: “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012.” The email referred to Lycamobile's donations to the British Asian Trust, which was founded by the Prince of Wales to tackle poverty in South Asia, not to his youth foundation The Prince's Trust which has never received any money from Lycamobile.
    The HMRC response went on to say that Lycamobile would be likely to challenge any raids on its properties in court and may succeed because the French request did not contain enough “solid information”. The request stalled, and Lycamobile’s UK offices were never searched.
    But the French investigation has continued to gather steam. Lycamobile has been ordered to pay €20 million bail after its two French companies were formally charged with money laundering in a Paris court in November and January.
    When BuzzFeed News first approached HMRC to ask about its response to the French request, the agency’s senior press officer strongly denied that Lycamobile’s donations would ever be cited as a reason not to conduct criminal raids. “No HMRC official would ever write such a letter,” he said. “This is the United Kingdom for God’s sake, not some third world banana republic where the organs of state are in hock to some sort of kleptocracy.”
    However, after verifying the contents of the email seen by BuzzFeed News, another HMRC spokesman said that it was “regrettable”.
    “We never take political donations into account when working out how to work with other countries, or indeed on our own, in enforcing the tax law,” he said, adding that the reference to Lycamobile’s links to the Tories and Prince Charles had been included only as “background” information. “But I can see how this is open to being read that way, which is why that should not be in there,” he said.
    The revelation that the government refused to assist a criminal investigation into a major political donor has raised serious questions about Conservative pledges to crack down on money laundering and financial corruption in London and brought the party’s relationship with the troubled telecoms giant under renewed scrutiny.
    Prime minister Theresa May has vowed to “act vigorously” against those suspected of money laundering to “safeguard the integrity of Britain’s financial economy.” Yet after BuzzFeed News revealed that Lycamobile was depositing rucksacks stuffed with hundreds of thousands of pounds of cash at Post Offices all around London — practices experts said should raise red flags with anti-money-laundering and tax authorities — the government has taken no criminal action against the company, even after the French launched their money laundering probe. Meanwhile, the Conservative party has accepted a total of £2.2 million from Lycamobile — including more than £800,000 after BuzzFeed News first exposed the company’s suspicious business practices.
    In a statement this week, the Conservatives announced that they had decided to stop taking any further money from Lycamobile two years ago. The party last accepted a donation from the telecoms company in late July 2016, a month after BuzzFeed News revealed the French money laundering raids.
    Lord (Ken) Macdonald, England’s former director of public prosecutions, said the government’s response to the French request for assistance represented “a descent into banana republic law enforcement” – and called on the UK authorities to cooperate fully with the investigation. “It would be beyond worrying if HMRC were to regard the payment of political donations as a shield against criminal investigation,” he said. “Obviously the fact that a company may have the resources to challenge HMRC’s actions in court is not a reason for authorities to back off. Otherwise, wealthy organisations would be beyond the reach of the law.”
    Meg Hillier, chair of the Commons public accounts committee which oversees the work of HMRC, said she would grill civil servants from the department over their refusal to investigate Lycamobile when they appear before MPs later this month. “The size of a company or its connections should not have any bearing on whether HMRC go in and do an investigation,” she said. “I think they should explain to the British taxpayer what their rationale was for refusing the request.”
    Yvette Cooper, who heads parliament's home affairs committee, said HMRC’s response was an “extremely serious concern” and called for an independent review into Britain’s decision to refuse to assist the French investigation. “Political donations should never be a reason for HMRC not to act,” she said. “The Government must explain what it will do to make sure that there is nothing holding a proper criminal investigation back.
    The Liberal Democrat leader Vince Cable said HMRC’s response was “deeply disturbing” – calling on Theresa May to “take personal ownership of the issue” and return all Lycamobile’s donations until the matter has been “thoroughly investigated”.
    The telecoms giant is among the world’s largest mobile virtual network operators, buying international airtime in bulk from the main networks and selling it to millions of customers around the world on inexpensive prepaid calling cards. Its dubious business practices first came to light in 2015 when BuzzFeed News secretly filmed cash couriers depositing cash-stuffed rucksacks at Post Offices scattered across London.
    The practice was described as “deeply suspicious” and “worryingly characteristic of money laundering” at the time by Macdonald, who called for a “serious investigation” into the revelations. BuzzFeed News also revealed how Lyca’s sprawling network of offshore companies was used to funnel money out of Sri Lanka by relatives of the country’s deposed despot Mahinda Rajapaksa.
    The Conservatives have deep ties to the company. Lycamobile’s Sri Lankan-born owner, Subaskaran Allirajah, paid to join the exclusive Leader’s Group for top donors that dines privately with the prime minister and members of the cabinet, and is close to the foreign secretary Boris Johnson after bankrolling his London mayoral campaign.
    Lycamobile has also made significant donations to the British Asian Trust. The charity said it had carried out all the appropriate due diligence checks on Lycamobile’s donations.
    Lycamobile – which has reported an annual turnover of €1.5 billion and legally avoids corporation tax by moving money to the tax haven of Madeira through its vast network of more than 60 offshore companies – has always insisted that its business is wholly aboveboard. It said that the cash drops caught on film by BuzzFeed News were just “day to day banking” of legitimate takings from the sale of its international calling cards. Its latest accounts indicate that it is engaged in confidential “discussions and enquiries” with HMRC about related party transactions between its parent company in the UK and its various offshore entities.
    The company is suing BuzzFeed News for libel in France over our reporting on the Paris raids and said in a statement this week that it continues to deny all the “inflammatory” allegations.
    The Conservatives are now under mounting pressure to explain why the government refused to assist with a criminal investigation into Lycamobile — and why the party carried on taking its money — despite compelling evidence that the company’s accounts were mired in highly suspicious activity.
    In 2015, a team of reporters from BuzzFeed News spent five weeks following three cash couriers employed by Lycamobile as they drove around London depositing rucksacks bulging with cash at Post Offices all over the city. The team were acting on a tip that the men were suspected of laundering money on behalf of the telecoms giant by funnelling questionable cash into a network of different accounts in order to obscure its origins. The reporters watched the men leave the company’s east London depot each morning in an unmarked black people-carrier and followed them to multiple Post Offices, where they were secretly filmed handing sums of up to £240,000 over the counter.
    The team established that the couriers had regularly used at least 10 separate Post Office branches to deposit up to £1 million a week, dating back several years. The bag drops were especially bizarre because the security firm G4S was also filmed visiting the Lyca depot and collecting as many as 40 sacks of money at a time in an armoured van – the normal way for a cash-rich business to transport its takings.
    When Lycamobile was confronted over its suspicious cash-handling practices, it said the money came from the legitimate sale of international calling cards – but declined to explain why it sent staff to multiple Post Offices with bags of banknotes every day despite having an armoured and properly audited cash-in-transit service at its disposal.
    After exposing the suspicious bag drops, BuzzFeed News revealed that authorities in Sri Lanka had launched an investigation into a key offshore company in the Lyca empire suspected of being used to launder money embezzled by the country’s autocratic former president Mahinda Rajapaksa.
    The revelations came in the wake of repeated criticism of Lyca from its own auditors for failing to properly account for tens of millions of pounds sloshing through its byzantine accounts. Internal Tory emails obtained by BuzzFeed News showed that the party had accepted a large donation from the telecoms giant just days after the party’s compliance department raised concerns about its chaotic accounting in 2012.
    In the wake of the story, the Conservative party faced mounting pressure to sever its ties with its biggest donor, and legal experts called on the police to launch a criminal investigation. But the authorities took no action – and the party continued to allow hundreds of thousands of pounds to flow into its coffers from Lycamobile. It appeared that the company’s highly unorthodox bag drops and the questionable flow of money through its corporate network would escape official investigation.
    But weeks after BuzzFeed News published secret footage of the cash couriers in London, financial investigators in Paris decided to take a closer look at the company’s activities in France.
    Analysts at the country’s Tracfin financial intelligence unit quickly spotted a curious trend. While one of the company’s two French entities – Lycamobile Sarl – appeared to be doing legitimate business with established telecoms customers, the other – Lycamobile Services – had billed tens of millions of minutes of international airtime to what appeared to be ghost companies.
    Lycamobile Services had received payments totalling €75 million over a nine-month period in 2015 from 19 companies that, the analysts noted in their report, bore all the hallmarks of being shell companies: “recent creation, address with a virtual office or domestic dwelling, non-payment of VAT”. The invoices these companies had submitted to their banks from the telecoms company seemed to the analysts to be “manifestly fake”. And the funds were apparently transferred into Lyca’s offshore network via a bank account in London.
    BuzzFeed News obtained details of the evidence compiled by the Tracfin analysts and visited the 19 customers of Lycamobile Services, all of which had paid more than €1 million for airtime, to see whether it was possible to buy a SIM or prepaid calling card from any of them. All but one were registered at PO boxes, vacant offices, derelict buildings, or a construction site. At none of these locations was it actually possible to buy any Lyca products.
    The Tracfin analysts surmised that the apparent shell companies were fronts for illicit payments, noting that “the total lack of economic logic accruing to these transactions implies the likely existence of a vast system of fake billing”. They prepared a secret intelligence report detailing allegations that the telecoms company “gave its clients, in particular via Lycamobile Services, an illegal money-laundering service”.
    That report arrived in the offices of the Parquet National Financier, France’s serious financial crime prosecution service, on 7 January 2016, and prosecutors quickly launched an investigation into alleged money laundering by Lycamobile.
    Investigators spent time studying the surveillance footage gathered by BuzzFeed News in London, and sent undercover police teams out to follow a group of cash collectors carrying out similar activities in Paris. Tracking devices were installed on their cars, and their phones were wiretapped, as were those of Lyca executives at its French headquarters.
    The French cash couriers were found to be in contact with Alain Jochimek, the company’s general manager in France, and also with representatives of the company in London, sources close to the investigation told BuzzFeed News. In June 2016, Paris police conducted raids on Lyca’s headquarters and a series of residential and business addresses across the city, arresting 19 people and seizing more than €1 million in cash. Jochimek was charged with money laundering and VAT fraud, along with eight others.
    Wiretaps had revealed that the cash couriers were also in contact with a couple who were suspected of acting as a conduit to criminal money-laundering networks and who appeared to control most of the alleged shell companies that had funnelled millions into Lycamobile Services via what seemed to be puppet directors. The man and woman were also charged.
    When BuzzFeed News revealed the French arrests and exposed the network of alleged shell companies pumping tens of millions of euros into Lyca’s accounts, the Conservative party faced renewed calls from opposition politicians to sever ties with the troubled company – but they were ignored. The party accepted a gift of £45,000 the month after the Paris raids.
    Pressure for a criminal investigation in the UK also intensified. “The developments in Paris make stark what has been obvious for months – the urgent need for a serious and sustained investigation into Lycamobile's alarmingly unconventional UK business practices,” said Macdonald.
    But the British police took no action.
    In Paris, the prosecution gathered pace. When Jochimek was hauled in for questioning, he told police that his activities in France had been overseen by executives at Lycamobile’s headquarters in London, who controlled all the company’s bank accounts. Added to the fact that the money from the illicit shell companies had flowed out of Lycamobile’s French accounts and into its offshore network via a bank account in London, this was enough to convince prosecutors that a raid on the company’s UK premises could be key to the investigation.
    When one nation wants help from another in a criminal investigation, it makes a formal request for “mutual legal assistance”. So prosecutors wrote to the HMRC department in London that deals with such requests to ask for help raiding Lycamobile’s headquarters in the British capital, as well as the home address of an executive who had been implicated by Jochimek in his police interview.
    The response, which came days later from a civil servant named Christopher Wood on HMRC’s mutual legal assistance team, was a resounding rejection. Wood said he had consulted a lawyer and relayed concerns about the French request under seven headings. Under the first – “Complexity of the case” – he noted that “this is clearly a very large investigation on behalf of the French authorities and involves companies with vast assets at their disposal”. Lycamobile would be likely to challenge any search of its premises in the courts, he wrote, and if the company succeeded, any material that had been seized would have to be returned. “This can be catastrophic for any investigation,” he noted, “especially one of the size and complexity of this.” 
    The second problem with the French request came under the heading “Background on Lycamobile in the United Kingdom.” Here, Wood noted that the target of the French investigation was “a large multinational company with 2015 revenue recorded as 1.6bn Euros”. He continued: “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012.”
    The other headings raised concerns about what Wood considered to be a number of shortcomings in the construction of the French request for assistance. The application to search the home of the Lycamobile executive would fail, he predicted, because “the very flimsy evidence of a suspect” would not be enough to satisfy “any crown court judge considering an application for a search warrant of a multi-billion Euro company such as Lycamobile”. In order to obtain a warrant to search the business addresses, Wood said, the French would need to provide, in advance, a “detailed explanation of what type of material information is expected to be found and specifically where it is likely to be found”.
    Wood concluded his missive: “We wish to assist the French authorities as much as possible but there is a need to point out where an application for search warrants is unlikely to succeed due to lack of solid information.”
    Sources close to the mutual legal assistance process told BuzzFeed News that the response sparked tensions between the British and French authorities. After Britain refused to budge, French prosecutors abandoned the request and switched to other lines of inquiry.
    The French prosecution of the telecoms giant continued, and by January this year investigators had obtained enough evidence to charge Lycamobile’s two French companies with orchestrating a major money laundering scheme as well as evading tens of millions of euros of VAT. The full trial is expected to take place at the end of 2018.

    Columbine students hold voter registration rally ahead of shooting anniversary

    Students at Columbine High School participated in a voter registration rally Thursday ahead of the 19th anniversary of the mass shooting at the school.
    The Vote for Our Lives event in Littleton, Colo., featured speakers who survived the mass shooting at Columbine, as well as survivors of the Parkland, Fla., high school mass shooting, Reuters reported.
    The event was held the night before students across the country prepare to walk out of schools Friday to protest gun violence.
    Students from more than 2,600 institutions plan to walk out of classes at 10 a.m. Friday as part of a call to action by Parkland survivors.
    Many Parkland students have become key figures in the anti-gun violence movement since the mass shooting at their school earlier this year that left 17 people dead.
    The students organized the March for Our Lives in D.C. last month, drawing in hundreds of thousands of attendees and sparking sister events at cities across the world.
    Now the students are focusing on ways to address gun violence and pass restrictions on guns, including registering teenagers and others to vote.
    “This movement is the next step in the series of pressure points placed on politicians to take action,” Vote for Our Lives said in a statement to Reuters. “We walked out, then we marched, and now we vote.”
    Organizers behind Friday's walkout say their goal is to hold officials accountable, promote possible fixes to gun violence and get more students to participate in politics.
    Protesting students are asked to wear orange and hold a 13-second moment of silence to honor the Columbine victims.
    Columbine students will not be walking out because the school will be closed as part of a longstanding tradition. Students are asked to participate in community service instead.
    Students across the country participated in a similar walkout last month.

    A payday lender is accused of stealing millions from customers. Trump’s CFPB is now letting them off the hook.

    The Consumer Financial Protection Bureau (CFPB) is taking it easy on payday lenders accused of preying on low-income workers.
    In the agency’s first report to Congress since Mick Mulvaney took the helm in November, the CFPB said it is dropping sanctions against NDG Financial Corp, a group of 21 businesses that the agency, under President Obama, had accused of running “a cross-border online payday lending scheme” in Canada and the United States.
    “The scheme primarily involved making loans to U.S. consumers in violation of state usury laws and then using unfair, deceptive, and abusive practices to collect on the loans and profit from the revenues,” the CFPB lawyers argued in the complaint filed in the Southern District of New York in 2015.
    The CFPB’s lawsuit had been winding its way through the courts until Mulvaney took over the bureau. One of the lead attorneys defending the payday lenders was Steven Engel, who is now assistant attorney general at the US Justice Department, and who was listed as an active attorney in the case until November 14, the day after he was sworn into office.
    In February, the agency dismissed charges against six defendants in the case, according to federal court records. The reason for the dismissal was not explained in the court motion, and the CFPB declined to answer Vox’s questions about the case.
    Now the CFPB is “terminating sanctions” against the remaining defendants, according to the agency’s latest report to Congress. A federal judge had sanctioned the uncooperative defendants in March by entering a default judgment against them, which held them liable for the charges of unfair and deceptive business practices. The next step was to figure out how much they would pay in damages to consumers and attorney’s fees — a step that the CFPB suggests it won’t be taking anymore.
    The CFPB’s dismantling of the case against NDG is the latest example of the bureau backing off of payday loan companies accused of defrauding consumers — an industry that donated more than $60,000 to Mulvaney’s past congressional campaigns.
    The industry also appears to be currying favor with the Trump administration another way: This week, the Community Financial Services Association of America, which represents payday lenders, is holding its annual conference at Trump National Doral near Miami — a gathering that has been greeted by protesters.

    A new day for payday lenders

    In January, the CFPB dropped another lawsuit against four online payday lenders that allegedly stole millions of dollars from consumers’ bank accounts to pay debts they didn’t owe. A different payday lender, World Acceptance Group (a past donor to Mulvaney’s campaigns), announced that month that the CFPB had dropped its probe of the South Carolina company.
    In March, a Reuters investigation found that the agency had also dropped a lawsuit lawyers were preparing to file against another payday lender, called National Credit Adjusters, and that Mulvaney was weighing the possibility of halting lawsuits against three others. Those cases sought to return $60 million to consumers for alleged abusive business practices.
    The agency has not explained why the cases were dropped. And Mulvaney was candid with members of Congress about the bureau’s new approach to protecting consumers. “The bureau practice of regulation by enforcement has ceased,” he told members of the House Financial Services Committee on April 11.
    Indeed, the CFPB has taken only one new enforcement action against financial companies since Mulvaney took over, a massive fine against Wells Fargo announced Friday. But it has gone even further to help payday loan businesses — dismissing cases and investigations that were already underway, for no stated reason.

    Payday loans are terrible for consumers

    The Consumer Financial Protection Bureau was created as part of the Dodd-Frank Act of 2010, which sought to regulate banks and lenders in the wake of the financial crisis. One of the main reasons for creating the quasi-independent agency was to protect consumers in the financial sector, particularly those consumers seeking mortgages, student loans, and credit cards. The CFPB regulates the financial arena in other ways — for instance, to make sure lenders aren’t discriminating against certain customers (a mission that is also being rolled back).
    Payday loans have long been one of the sketchiest financial products available to consumers. These short-term loans are typically offered to low-income workers who don’t have credit or have bad credit. They are essentially a paycheck advance when someone needs cash to pay a bill.
    But the fees are astronomical. For example, most payday loans charge a percentage or dollar amount for every $100 borrowed. According to the CFPB, $15 for every $100 is common, and amounts to a 391 annual percentage rate (APR) for a two-week loan. But the way they trap consumers in a cycle of debt is through their access to the customer’s bank account, either through a check or ACH transfer.
    On the worker’s payday, they cash the check for the full amount of the loan and fees. That means the worker has even less money to pay bills for next month, according to the Center for Responsible Lending.
    [Payday lenders] take the money out regardless of whether there is enough money in the account to cover living expenses. Sometimes this leads to overdrafts or insufficient funds fees. Sometimes it compels the customer to take another loan to cover living expenses.
    The CFPB estimates that 12 million Americans used payday loans in 2013, which includes traditional storefront locations and online payday lenders. That year, about 90 percent of all loan fees came from consumers who borrowed seven or more times, according to the agency, and 75 percent were from consumers who borrowed 10 or more times.
    Those numbers show how dependent payday lenders are on keeping customers trapped in debt and unable to pay their bills.
    This business model has sparked so much controversy that at least 15 states and the District of Columbia have banned payday lending. And the Pentagon considered these loans so harmful to military service members that Congress banned businesses from providing them to military personnel back in 2006.
    Now, under Mulvaney’s leadership, the CFPB is letting payday lenders continue these practices, much to the aggravation of consumer advocates. The head of the Center for Responsible Lending slammed Mulvaney after news broke that he was dropping the lawsuit against National Credit Adjusters and three other payday lenders.
    “Mick Mulvaney is letting predatory payday lenders off the hook while they rip off American consumers,” Diane Standaert, executive vice president for the consumer watchdog group, said in a statement. “The companies...have a well-documented history of causing borrowers financial devastation. If they have committed illegal actions, they should be held accountable.”

    Mulvaney plans to ease rules for payday companies

    Before Richard Cordray stepped down as director of the CFPB, the agency had just finalized a rule to prevent payday lenders from giving money to people who can’t repay the loans.
    The regulation, known as the Payday, Vehicle Title, and Certain High-Cost Installment, requires lenders to check whether a borrower can repay the loan before making it. The agency argued that the rule would still give consumers access to short-term loans because they could still take out six payday loans per year regardless of their ability to pay back the money. Lenders would only need to verify a customer’s likelihood to repay the debt when they take out a seventh loan or more.
    In January, the CFPB released a statement saying that it plans to reconsider the rule, which is set to go into effect in August. Mulvaney said during congressional testimony that the wanted to “reconsider elements that may create unnecessary burden or restrict consumer choice.”
    Payday lenders have been pushing back against the rule, and on Monday, they filed a lawsuit to block it before it goes into effect.
    Community Financial Services Association of America, the largest trade group for payday lenders, says the rule would “virtually eliminate” their business model, which provides short-term loans to millions of low-income consumers who lack access to credit cards or bank loans. The Consumer Service Alliance of Texas joined the trade group in the lawsuit filed in a federal district court in Austin.
    In all, 2018 is turning out to be a good year for payday lenders.