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36 Hours After Russell Vought Took Over Consumer Bureau, He Shut Its Operations

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36 Hours After Russell Vought Took Over Consumer Bureau, He Shut Its Operations

The day before Linda Wetzel closed on her retirement home in Southport, N.C., in 2012 — a cozy place where she could open the windows at night and catch an ocean breeze — the bank making the loan surprised her with a fee she hadn’t expected. Ms. Wetzel scoured her mortgage paperwork and couldn’t find the charge disclosed anywhere.

Ms. Wetzel made the payment and then filed an online complaint with the Consumer Financial Protection Bureau. The bank quickly opened an investigation, and a month later, it sent her a $5,600 check.

“My first thought was ‘thank you.’ I was in tears,” she recalled. “That money was a year or two of savings on my mortgage. It was my little nest egg.”

Ms. Wetzel’s refund is a tiny piece of the work the bureau has done since it was created in 2011. It has clawed back $21 billion for consumers. It slashed overdraft fees, reformed the student loan servicing market, transformed mortgage lending rules and forced banks and money transmitters to compensate fraud victims.

It may no longer be able to carry out that work.

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President Trump on Friday appointed Russell Vought, who was confirmed a day earlier to lead the Office of Management and Budget, as the agency’s acting director. Mr. Vought was an author of Project 2025, a conservative blueprint for upending the federal government that called for significant changes, including abolishing the consumer bureau.

In less than 36 hours, Mr. Vought threw the agency into chaos. On Saturday, he ordered the bureau’s 1,700 employees to stop nearly all their work and announced plans to cut off the agency’s funding. Then on Sunday, he closed the bureau’s headquarters for the coming week. Workers who tried to retrieve their laptops from the office were turned away, employees said.

The bureau “has been a woke & weaponized agency against disfavored industries and individuals for a long time,” Mr. Vought wrote Sunday on X. “This must end.”

Created by Congress in the aftermath of the housing crisis that set off the Great Recession, the consumer bureau became one of Wall Street’s most feared regulators, with the power to issue new rules — and penalize companies for breaking them — around mortgages, credit cards, student loans, credit reporting and other areas that affect the financial lives of millions of Americans.

The bureau’s actions made it a lightning rod for criticism from banks and Republican lawmakers — and put it squarely in the Trump administration’s cross hairs.

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The agency’s foes have long called for its elimination, which only Congress has the power to do. Elon Musk, the billionaire leader of a government efficiency team that has created havoc throughout the federal government, posted “CFPB RIP” on his social media platform X on Friday. A few hours earlier, his associates had gained access to the consumer bureau’s headquarters and computer systems.

The National Treasury Employees Union, which represents the bureau’s employees, filed a lawsuit against Mr. Vought on Sunday night. Granting Mr. Musk’s team access to employee records violated the Privacy Act, the 1974 law regulating how the government handles individuals’ personal information, the union said in its complaint, which was filed in federal court in Washington.

Agency workers fear their employment data could be used for online harassment or “to blackmail, threaten or intimidate them,” the complaint said. Workers are also concerned about disclosure of their personal health or financial details, the union added.

The union filed a second lawsuit against the acting director over his efforts to freeze the agency’s work. Mr. Vought’s orders illegally infringe, the union said, on “Congress’s authority to set and fund the missions” of the consumer bureau.

Representatives of the consumer bureau and the budget office did not respond to requests for comment.

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During the first Trump administration, when Republicans controlled both chambers of Congress, lawmakers failed to amass enough votes to abolish the agency. Some have indicated that they would like to try again. Senator Bill Hagerty, a Tennessee Republican who serves on the Senate Banking Committee, called the bureau a “rogue agency” on Sunday on the CBS News program “Face the Nation.”

“It’s been basically a reckless agency that’s been allowed to go way beyond any mandate that I think was originally intended,” Mr. Hagerty said. “It’s time to rein it in.”

Senator Elizabeth Warren, Democrat of Massachusetts, who fought for the agency’s creation and who describes herself as its “mom” on her X biography, has spent the last decade battling attempts to dismantle the consumer bureau.

“President Trump campaigned on helping working families, but Russ Vought just told Wall Street that it’s open season to scam families,” she said Sunday in a written statement. “What Vought is doing is illegal and dangerous, and we will fight back.”

Many of the agency’s actions have directly affected Americans’ pocketbooks. Its rules overhauled the mortgage market, curbing the kinds of subprime loans that set off the housing crisis. Pressure from the bureau led major banks to reduce or eliminate their overdraft fees, and a recently finalized rule would cap most of those fees at $5.

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The agency recently adopted rules to eliminate medical debt from credit reports and limit most credit card late fees to $8 or less per month, but lawsuits have delayed those rules from taking effect.

“It’s striking to me that people’s economic dissatisfaction created the Consumer Financial Protection Bureau, and people’s economic dissatisfaction created Trump,” said Shayak Sarkar, a law professor at University of California, Davis.

Mr. Trump’s team has given priority to attacks on specific agencies — like U.S. Agency for International Development and the consumer bureau — that serve vulnerable populations, Mr. Sarkar said, while throwing “a lot of federal support and cheering” at agencies like Immigration Customs and Enforcement, which has intensified its immigration crackdowns.

While the bureau cannot be shuttered without congressional action, its director has the power to radically alter its approach. During Mr. Trump’s first term, he appointed Mick Mulvaney — then the director of the budget office Mr. Vought now leads — as the bureau’s acting director. Mr. Mulvaney called the agency a “joke” in “a sick, sad kind of way” and sharply curtailed its enforcement actions and rule making work.

The agency’s powers have swung like a pendulum. It moved aggressively when Democrats held the White House but pulled back during Mr. Trump’s first term. Mr. Mulvaney and his Trump-appointed successor, Kathleen Kraninger, put the bureau into a kind of hibernation, gutting rules that would have wiped out much of the payday lending market and slashing the bureau’s enforcement actions.

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But several current agency employees, who spoke confidentially for fear of retribution, said Mr. Vought’s order on Saturday stretched beyond what occurred during the last Trump administration.

His instruction to “cease all supervision and examination activity” caused particular alarm. While other federal agencies — including the Federal Deposit Insurance Corporation, Federal Reserve and Office of the Comptroller of the Currency — also oversee banks, the consumer bureau is the sole regulator for nonbank lenders. Those companies hold a large share of the $13 trillion mortgage market.

Mr. Vought also said he intended to cut off the consumer bureau’s funding, which comes directly from the Federal Reserve, outside the usual congressional appropriations process. The agency’s budget for the 2025 fiscal year calls for around $800 million in annual spending, and the Fed transferred $245 million to the bureau in January to fulfill its latest request.

Mr. Vought wrote on X that he had told the Fed that the bureau would not be taking its next funding draw “because it is not ‘reasonably necessary’ to carry out its duties.”

Adam Levitin, a professor at Georgetown Law who specializes in financial regulation, said on Sunday that Mr. Vought’s orders might be illegal. Some of the federal laws that govern the consumer bureau order it to supervise specific entities, and that work does not appear to be discretionary, he said.

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The acting director “has the ability to seriously hobble the C.F.P.B. through a bunch of slow bleeds, but he’s trying to skip all the necessary steps and just go for an immediate death blow,” Mr. Levitin said. “He may not have the legal ability to actually do that, but I’m not sure how much that’s going to matter. A lot of the way the Trump administration has been dealing with regulatory agencies is just kind of a blitzkrieg tactic, where a key component is creating fear, uncertainty and chaos.”

A rally on Saturday outside the bureau’s headquarters, organized by its staff union, drew a few hundred participants. A Maryland resident, who asked that her name be withheld for fear of retribution from Mr. Trump’s allies, attended with her husband, a federal worker, to support the agency’s employees.

“I don’t think people understand what the C.F.P.B. does,” she said. “The administration said they’re closing it because of fraud, but the bureau’s literal job is to protect people from fraud and junk fees and predatory lenders.”

Ms. Wetzel, the retiree who used her $5,600 refund to replace the floors in her new home, said the quick action on her complaint made her feel empowered.

“It was such a relief to have the government saying what the bank did was wrong, that this is not the rule of law,” she said.

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Consumers are spending $22 more a month on average for streaming services. Why do prices keep rising?

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Consumers are spending  more a month on average for streaming services. Why do prices keep rising?

Six years ago, when San José author Katie Keridan joined Disney+, the cost was $6.99 a month, giving her family access to hundreds of movies like “The Lion King” and thousands of TV episodes, including Star Wars series “The Mandalorian,” with no commercials.

But since then, the price of an ad-free streaming plan has ballooned to $18.99 a month. That was the last straw for 42-year-old Keridan, whose husband canceled Disney+ last month.

“It was getting to where every year, it was going up, and in this economy, every dollar matters, and so we really had to sit down and take a hard look at how many streaming services are we paying for,” Keridan said. “What’s the return on enjoyment that we’re getting as a family from the streaming services? And how do we factor that into a budget to make sure that all of our bills are paid at the end of a month?”

It’s a conversation more people who subscribe to streaming services are having amid an uncertain economy.

Once sold at discounted rates, many platforms have raised prices at a clip consumers say frustrates them. The entertainment companies, under pressure from investors to bolster profits, have justified upping the cost of their plans to help pay for the premium content they provide. But some viewers aren’t buying it.

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Customers are paying $22 more for subscription video streaming services than they were a year ago, according to consulting firm Deloitte. As of October, U.S. households on average shelled out $70 a month, compared with $48 a year ago, Deloitte said.

About 70% of consumers surveyed last month said they were frustrated the entertainment services that they subscribe to are raising prices and about a third said they have cut back on subscriptions in the last three months due to financial concerns, according to Deloitte.

“There’s a frustration, just in terms of both apathy, but also from a perspective that they just don’t think it’s worth the monthly subscription cost because of just fatigue,” said Rohith Nandagiri, managing director at Deloitte Consulting LLP.

Disney+ has raised prices on its streaming service nearly every year since it launched in 2019 at $6.99 a month. The company bumped prices on ad-free plans by $1 in 2021, followed by $3 increases in 2022 and 2023, a $2 price raise in 2024 and, most recently, a $3 increase this year to $18.99 a month.

Disney isn’t the only streamer to raise prices. Other companies, including Netflix, HBO Max and Apple TV also hiked prices on many of their subscription plans this year.

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Some analysts say streamers are charging more because many services are adding live sports, the rights to which can cost millions of dollars. Streaming services for years have also given consumers access to big budget TV shows and original movies, and as production costs rise, they expect viewers to pay more, too.

But some consumers like Keridan have a different perspective. As much as some streaming platforms are adding new content like live sports, they are also choosing not to renew some big budget shows like “Star Wars: The Acolyte.” Keridan, a Marvel and Star Wars fan, said she mainly watched Disney+ for movies such as “Captain America: The Winter Soldier” and shows like “The Mandalorian.” Now she’s going back to watching some programs ad-free on Blu-Ray discs.

While Keridan cut Disney+, her family still subscribes to YouTube Premium and Paramount+. She said she uses YouTube Premium for workout videos instead of paying for a gym membership. Her family enjoys watching Star Trek programs on Paramount+, like the third season of “Star Trek: Strange New Worlds,” Keridan said.

Other consumers are choosing to keep their streaming subscriptions but look for cost savings through cheaper plans with ads, or by bundling services.

“Consumers are more willing today than ever to withstand advertising and for the sake of being able to get content for a lower subscription rate,” said Brent Magid, CEO and president of Minneapolis-based media consulting firm Magid. “We’ve seen that number increase just as people’s budgets have gotten tighter.”

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Keridan said she’s already cutting other types of spending in her household in addition to quitting Disney+. The amount of money her family spends on groceries has gone up, and in order to save cash, they’ve cut back on traveling for the year. Typically, Keridan says, they would go on two or three vacations annually, but this year, they will only go to Disneyland in Anaheim.

But even the Happiest Place on Earth hasn’t escaped price hikes.

“Just as the streaming fees have risen, park fees have risen,” Keridan said. “And so it just seems every price of anything is rising these days, and they’re now directly in competition with each other. We can’t keep them all, so we have to make hard cuts.”

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Former Google chief accused of spying on employees through account ‘backdoor’

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Former Google chief accused of spying on employees through account ‘backdoor’

When Columbia University law and MBA student Michelle Ritter met former Google chief executive Eric Schmidt in 2020, she said she wanted to pitch a potential investment in a sports tech startup she had been developing.

That dinner blossomed into far more, a romance and business partnership in which she says the 70-year-old billionaire invested in excess of $100 million into a jointly owned tech incubator — before it all fell apart.

Now, Ritter is accusing Schmidt of stealing business out from under her, sexually assaulting her twice during their relationship, and tapping his Google background to hack into her email and online computer files, according to a lawsuit filed Wednesday in Los Angeles County Superior Court.

“During their relationship, Schmidt confided that when he worked at Google, he built an insider “backdoor” to Google servers with a team of Google engineers in order to spy on Google employees. Accordingly, the backdoor enabled him to access anyone’s Google account and private information,” the lawsuit says.

Google is also named as a defendant in the lawsuit and is alleged to “knowingly acquiescing in, failing to remedy, and materially assisting the unauthorized access” into Ritter’s accounts despite being provided notice. Schmidt and the company are accused of violating the California Comprehensive Computer Data Access and Fraud Act, and a section of the state penal code that prohibits wiretapping.

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Patricia Glaser, an attorney representing Schmidt, called the lawsuit “yet another desperate and destructive effort to publish false and defamatory statements to escape accountability from an existing arbitration over a business dispute.”

Glaser added: “The claims made here are directly contradicted by her own words … and are just a final Hail Mary to save her from the consequences of her own actions. We are confident that we will prevail on both the specific legal issue enforcing the arbitration and disproving these fabricated pathetic allegations.”

Google did not immediately respond to a request for comment.

The complaint is the latest filing in a legal dispute that stretches back to at least December 2024, when Ritter sought a domestic violence restraining order against Schmidt. She later withdrew it after reaching a financial settlement with Schmidt with whom she had started the high-tech New York incubator with offices in Los Angeles, according to court records.

In her new lawsuit, Ritter alleges that Schmidt has not honored the settlement due to false accusations she was behind a media leak. She is seeking to have the settlement, which requires arbitration of disputes, thrown out.

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Schmidt’s attorneys have called her legal filings a “blatant abuse of the judicial system” and a “transparent hit piece intended to smear and defame” Schmidt, according to court records. He is seeking to have the dispute settled in arbitration.

Several records in the case are under seal and many filings are heavily redacted. The lawsuit seeks at least $100 million in damages, with the next hearing set for Dec. 4. She is being represented by the law firm of prominent Los Angeles attorney Skip Miller.

Schmidt served as Google chief executive from 2001 to 2011 and later as the chairman of the Silicon Valley company and its parent, Alphabet Inc., until 2017. He retains shares in parent Alphabet worth about $14 billion giving him a net worth of about $34 billion, according to Forbes. He owns multiple homes in greater Los Angeles.

In the application for the December 2024 restraining order, Ritter alleged she lived in an “absolute digital surveillance system” and that Schmidt had directed affiliates to steal her corporate website, take control of her digital business records and have personal investigators follow her parents, according to a court filing.

The restraining order request also asked the judge to order Schmidt to not assault her “sexually or otherwise.”

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The lawsuit filed on Wednesday provides more details about their business ventures and alleges a personal relationship that developed to the point that Schmidt made promises to marry her and have children, despite their 39-year age gap.

The lawsuit states their Steel Perlot venture was a success, with Schmidt investing more than $100 million into the accelerator and its startups in AI, crypto and other industries — prompting Schmidt to wrest control of the venture and its businesses from her.

Media reports suggest otherwise. Forbes has written the venture ran out of money in 2003 and needed millions from Schmidt to meet payroll and other expenses.

The lawsuit alleges that Schmidt became abusive as the relationship progressed and he “forcibly raped” her while on a yacht off the coast of Mexico in November 2021 and had sex with her without her consent during the Burning Man festival in Nevada in August 2023.

Schmidt, who has been married more than 40 years, has been linked romantically in the media with a series of much younger women.

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The bitter dispute with Ritter echoes another business disagreement he had with public relations executive Marcy Simon, with whom he had a two-decade relationship that ended in 2014. It also involved a troubled joint business venture, according to a New York Times report. The report did not involve sexual assault claims.

Schmidt has achieved a certain gravitas in Silicon Valley, serving as tech advisor to the Obama administration and the military, testifying about artificial intelligence on Capitol Hill and giving away more than $1 billion in charity.

He’s also a part owner of the Washington Commanders football team and has amassed a real estate portfolio estimated to be worth several hundred million dollars.

Schmidt is reported to have spent $110 million this year on the 56,000-square-foot mansion in Holmby Hills built by the late producer Aaron Spelling. In 2021, he acquired a 15,000-square-foot Bel Air estate previously owned by the Hilton family, where court records indicate Ritter lived at the time she filed the restraining order.

Schmidt earlier this year took a controlling interest in Relativity Space, a Long Beach startup founded in 2015 with the intent to bring 3-D manufacturing to rocketry.

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However, it has since shifted its focus and Schmidt indicated in a social media post that his interest may have to do with launching AI data centers into space due to their huge power needs.

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Warner Music Group and AI startup Udio reach agreement in fight over copyrighted music

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Warner Music Group and AI startup Udio reach agreement in fight over copyrighted music

Warner Music Group on Wednesday said it reached an agreement with artificial intelligence startup Udio, ending a legal battle over concerns that copyrighted music was being used to train AI models.

Under an agreement, Udio will release a platform next year using AI models trained on licensed and authorized music, the New York-based companies said. The music could include content from WMG’s publishing businesses, providing new revenue for artists and songwriters who choose to opt in, the companies added.

Udio declined to say which artists would be involved in its new platform, and WMG did not return a request for comment. WMG’s artist roster includes Ed Sheeran, Fleetwood Mac and Madonna.

The startup’s current platform allows users to write text prompts and create songs using AI. The new version, which is expected to launch next year, will let users create remixes, covers and new songs with the voices of artists and the compositions of songwriters who choose participate and those artists and writers will be credited and paid, the companies said.

“This collaboration aligns with our broader efforts to responsibly unlock AI’s potential — fueling new creative and commercial possibilities while continuing to deliver innovative experiences for fans,” said Robert Kyncl, WMG CEO, in a statement.

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WMG, Universal Music Group (UMG), Sony Music Entertainment and other music businesses sued Udio last year. In the lawsuit, Udio was accused of using hits like the Temptations’ “My Girl” to create a similar melody called “Sunshine Melody.” UMG owns the copyright to “My Girl.”

Udio said millions of people have used Udio since it launched in 2024, but did not break out specifically how many downloads or website users it has.

UMG settled with Udio last month. Udio declined to disclose the terms of the UMG settlement. The tech company also did not offer financial details about its platform collaboration with WMG, or which artists would be involved.

“Collaborating with WMG marks a significant milestone in our mission to redefine how AI and the music industry evolve together,” said Andrew Sanchez, co-founder and CEO of Udio, in a statement. “This partnership is a crucial step towards realizing a future in which technology amplifies creativity and unlocks new opportunities for artists and songwriters.”

The advancement of artificial intelligence in the arts has caused a range of emotions in the entertainment industry — from fear of job replacement to excitement over new ways to test bold ideas in music videos and music experimentation on slimmer budgets.

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After the UMG-Udio deal was announced, Jordan Bromley, a board member at the nonprofit Music Artists Coalition and Manatt Entertainment Leader, said he was “cautiously optimistic but insistent on details.”

Music Artists Coalition executive director Ron Gubitz said the announcements on the agreements “lack critical details songwriters and performers deserve.”

“The question still remains whether these deals will deliver the most important things artists deserve: consent, clarity, and compensation,” Gubitz said in a statement.

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