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Now, let's bring in row hit ch Oper to discuss the state of the economy this upcoming year. He's a former Consumer Financial Protection Bureau Director and also a former FTC commissioner from twenty eighteen to twenty twenty one. We have a lot to discuss here, especially because I wanted to kick some things off with the ACA subsidies expiration that we've been talking a lot about right now, rohit What exactly are these enhance ACA subsidies and what changes if they do in fact expire.
Yeah, So the law until really today gave people a little bit of a break on their health insurance premiums. But that's going to go away, and what we expect is that about five million people are going to go completely uninsured, and many more will likely move to plans with much higher deductibles and copays. I think the way that ends up playing out, it's not that people are suddenly going to get healthier, but we will see the
costs for healthcare land in different ways. For example, I think we're going to expect much higher credit card debt for people who are having to put that healthcare expense on a credit card or even using things like buy now, pay later in a healthcare setting. All of that I think is going to be a bit of a drag on consumer spending going forward.
Yeah, definitely sounds like a lot to grapple with if this ends up being the case. But who gets hit the hardest here? Would it be low income families, middle class workers, maybe older Americans?
Well, we're seeing actually a lot of people from all different demographics are going to get hit because it's not just people who purchase insurance through those exchanges, employers and small businesses. They are seeing their premiums go up and up, some people dealing with over thirty percent increases. That could lead a lot of employers to slow some of their wage growth. It could also mean that people are going
to deal with less high quality health insurance. The statistics suggests that the biggest hits are going to be in southern states Texas and Florida. We'll see some big increases in the number of uninsured. So that's going to have to play through their own economy and to the extent that hospitals and others are no longer going to be able to make ends meet, especially in rural areas. I really worry about those patients and where they're going to go.
Absolutely, and ultimately it's going to affect everybody in one way or another. Right, Rowheit, I want to ask you about the Consumer Financial Protection BURO because it's really on its last legs at the moment. A federal district judge did rule that the Trump administration must continue to invest in funding it. But what happens to consumers if there's no consumer watchdog? Can the administration get around this ruling somehow?
Well, here's what's so funny. As a candidate, Donald Trump was arguing and offering a proposal on how to cut credit card interest rates. But then as president, we have seen him essentially cut off and defund all the law enforcement protecting in consumers and those who look after Wall Street and Silicon Valley. We have seen zero law enforcement actions taken against banks and financial companies that broke the law. And that is really that is something that consumers are
going to pay for. During my time in office, I think we recovered about ten billion dollars from people who were cheated on an auto loan or credit card. So I think people are going to pay the price for this. But it's clear that the Trump administration is looking to shut all of this consumer protection down, but the courts have stopped them so far.
And the FED is now profitable, so it could potentially power the CFBB, which was a point of contention for some time now. The agency, assuming that it does work through some of next year, at least has twenty four items up for consideration at the moment, Will any of those rules get written? Do you think?
Well, it seems like they want to do everything they can to deregulate and let those who want to break the law do it more brazenly. We don't know what's going to happen regardless of whether the court allows this to go forward. This entire year, we are seeing increases in crimes against consumers and there's not much being done about it. Now. There's an exception to this. The state attorneys general of the states in the US have some
law enforcement power. We have seen some of them step up take action, filing lawsuits against banks like Capital One and tech companies. But of course that's never going to be a full replacement for a true federal law enforcement agency chargement.
And I should just mention you actually work for the state's Attorney's General. Right, you're leading their consumer protection and affordability working groups. We just want to put that in there.
Yeah, I help, yeah, I help them think through how are they going to step up to be able to prosecute some of these crimes that are happening, especially ones that are making life more expensive for people.
What is today's data tell you about the financial resilience of the American consumer?
Well, we got some new data yesterday that said that last year, consumers were paying about one hundred and sixty billion dollars in interest on their credit cards, and the number of people who are paying the minimum balance was ticking up. This current year, we've seen auto loan delinquencies really go up and consumers experiencing some real stress. So
you talked earlier about that case shaped economy. It is clear that while people on the high end are really spending, people who are living paycheck to paycheck are finding that the treadmill is getting faster for them. I think this is something really to closely watch in twenty twenty six about whether they are going to struggle even further and how that might affect the macro economy.
We're not quite seeing it in the labor market data yet, though, rohat are we Are you anticipating that the jobs report that we get next Friday, for example, will start to show a weakening labor market more or will it take some months into twenty twenty six before things like student loan delinquencies and so on get even worse and before we see the impact on young labor in particular.
It's really hard to say. Some people don't even know if we can fully trust the data. I think that we are clearly seeing some weakening in the labor market. One thing to really look at closely is to what extent is AI already causing employers to really not go big on hiring when it comes to young white collar workers, those young college graduates. Many of them, of course, are already facing a lot of student debt, high housing costs. That's going to really make it tough for that demographic
in particular. I think we're also seeing people quit at lower rates, not seeing a lot of places that they could move to new jobs with higher pay. So it's really tough to predict, but I think it's obvious to many people that, especially for younger people, but lots of other demographics, there's just going to be fewer opportunities than there were, say, two or three years ago.
Oheich.
Thank you so much for joining today, and a happy new Year to you. Looking forward to chatting with you again in twenty twenty six. Rohit Chopra of course the former CFPB director, former FTC commissioner, and of course it currently works for an association of the state attorneys general on their Consumer Protection and Affordability Working Group