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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Now, let's bring in row hit ch Oper to discuss

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Speaker 2: the state of the economy this upcoming year. He's a

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Speaker 2: former Consumer Financial Protection Bureau Director and also a former

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Speaker 2: FTC commissioner from twenty eighteen to twenty twenty one. We

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Speaker 2: have a lot to discuss here, especially because I wanted

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Speaker 2: to kick some things off with the ACA subsidies expiration

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Speaker 2: that we've been talking a lot about right now, rohit

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Speaker 2: What exactly are these enhance ACA subsidies and what changes

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Speaker 2: if they do in fact expire.

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Speaker 3: Yeah, So the law until really today gave people a

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Speaker 3: little bit of a break on their health insurance premiums.

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Speaker 3: But that's going to go away, and what we expect

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Speaker 3: is that about five million people are going to go

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Speaker 3: completely uninsured, and many more will likely move to plans

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Speaker 3: with much higher deductibles and copays. I think the way

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Speaker 3: that ends up playing out, it's not that people are

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Speaker 3: suddenly going to get healthier, but we will see the

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Speaker 3: costs for healthcare land in different ways. For example, I

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Speaker 3: think we're going to expect much higher credit card debt

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Speaker 3: for people who are having to put that healthcare expense

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Speaker 3: on a credit card or even using things like buy now,

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Speaker 3: pay later in a healthcare setting. All of that I

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Speaker 3: think is going to be a bit of a drag

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Speaker 3: on consumer spending going forward.

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Speaker 2: Yeah, definitely sounds like a lot to grapple with if

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Speaker 2: this ends up being the case. But who gets hit

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Speaker 2: the hardest here? Would it be low income families, middle

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Speaker 2: class workers, maybe older Americans?

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Speaker 3: Well, we're seeing actually a lot of people from all

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Speaker 3: different demographics are going to get hit because it's not

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Speaker 3: just people who purchase insurance through those exchanges, employers and

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Speaker 3: small businesses. They are seeing their premiums go up and up,

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Speaker 3: some people dealing with over thirty percent increases. That could

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Speaker 3: lead a lot of employers to slow some of their

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Speaker 3: wage growth. It could also mean that people are going

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Speaker 3: to deal with less high quality health insurance. The statistics

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Speaker 3: suggests that the biggest hits are going to be in

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Speaker 3: southern states Texas and Florida. We'll see some big increases

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Speaker 3: in the number of uninsured. So that's going to have

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Speaker 3: to play through their own economy and to the extent

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Speaker 3: that hospitals and others are no longer going to be

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Speaker 3: able to make ends meet, especially in rural areas. I

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Speaker 3: really worry about those patients and where they're going to go.

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Speaker 1: Absolutely, and ultimately it's going to affect everybody in one

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Speaker 1: way or another. Right, Rowheit, I want to ask you

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Speaker 1: about the Consumer Financial Protection BURO because it's really on

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Speaker 1: its last legs at the moment. A federal district judge

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Speaker 1: did rule that the Trump administration must continue to invest

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Speaker 1: in funding it. But what happens to consumers if there's

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Speaker 1: no consumer watchdog? Can the administration get around this ruling somehow?

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Speaker 3: Well, here's what's so funny. As a candidate, Donald Trump

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Speaker 3: was arguing and offering a proposal on how to cut

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Speaker 3: credit card interest rates. But then as president, we have

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Speaker 3: seen him essentially cut off and defund all the law

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Speaker 3: enforcement protecting in consumers and those who look after Wall

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Speaker 3: Street and Silicon Valley. We have seen zero law enforcement

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Speaker 3: actions taken against banks and financial companies that broke the law.

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Speaker 3: And that is really that is something that consumers are

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Speaker 3: going to pay for. During my time in office, I

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Speaker 3: think we recovered about ten billion dollars from people who

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Speaker 3: were cheated on an auto loan or credit card. So

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Speaker 3: I think people are going to pay the price for this.

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Speaker 3: But it's clear that the Trump administration is looking to

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Speaker 3: shut all of this consumer protection down, but the courts

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Speaker 3: have stopped them so far.

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Speaker 1: And the FED is now profitable, so it could potentially

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Speaker 1: power the CFBB, which was a point of contention for

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Speaker 1: some time now. The agency, assuming that it does work

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Speaker 1: through some of next year, at least has twenty four

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Speaker 1: items up for consideration at the moment, Will any of

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Speaker 1: those rules get written? Do you think?

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Speaker 3: Well, it seems like they want to do everything they

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Speaker 3: can to deregulate and let those who want to break

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Speaker 3: the law do it more brazenly. We don't know what's

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Speaker 3: going to happen regardless of whether the court allows this

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Speaker 3: to go forward. This entire year, we are seeing increases

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Speaker 3: in crimes against consumers and there's not much being done

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Speaker 3: about it. Now. There's an exception to this. The state

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Speaker 3: attorneys general of the states in the US have some

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Speaker 3: law enforcement power. We have seen some of them step

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Speaker 3: up take action, filing lawsuits against banks like Capital One

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Speaker 3: and tech companies. But of course that's never going to

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Speaker 3: be a full replacement for a true federal law enforcement

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Speaker 3: agency chargement.

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Speaker 1: And I should just mention you actually work for the

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Speaker 1: state's Attorney's General. Right, you're leading their consumer protection and

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Speaker 1: affordability working groups. We just want to put that in there.

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Speaker 3: Yeah, I help, yeah, I help them think through how

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Speaker 3: are they going to step up to be able to

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Speaker 3: prosecute some of these crimes that are happening, especially ones

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Speaker 3: that are making life more expensive for people.

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Speaker 2: What is today's data tell you about the financial resilience

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Speaker 2: of the American consumer?

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Speaker 3: Well, we got some new data yesterday that said that

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Speaker 3: last year, consumers were paying about one hundred and sixty

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Speaker 3: billion dollars in interest on their credit cards, and the

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Speaker 3: number of people who are paying the minimum balance was

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Speaker 3: ticking up. This current year, we've seen auto loan delinquencies

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Speaker 3: really go up and consumers experiencing some real stress. So

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Speaker 3: you talked earlier about that case shaped economy. It is

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Speaker 3: clear that while people on the high end are really spending,

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Speaker 3: people who are living paycheck to paycheck are finding that

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Speaker 3: the treadmill is getting faster for them. I think this

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Speaker 3: is something really to closely watch in twenty twenty six

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Speaker 3: about whether they are going to struggle even further and

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Speaker 3: how that might affect the macro economy.

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Speaker 1: We're not quite seeing it in the labor market data yet, though,

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Speaker 1: rohat are we Are you anticipating that the jobs report

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Speaker 1: that we get next Friday, for example, will start to

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Speaker 1: show a weakening labor market more or will it take

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Speaker 1: some months into twenty twenty six before things like student

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Speaker 1: loan delinquencies and so on get even worse and before

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Speaker 1: we see the impact on young labor in particular.

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Speaker 3: It's really hard to say. Some people don't even know

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Speaker 3: if we can fully trust the data. I think that

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Speaker 3: we are clearly seeing some weakening in the labor market.

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Speaker 3: One thing to really look at closely is to what

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Speaker 3: extent is AI already causing employers to really not go

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Speaker 3: big on hiring when it comes to young white collar workers,

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Speaker 3: those young college graduates. Many of them, of course, are

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Speaker 3: already facing a lot of student debt, high housing costs.

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Speaker 3: That's going to really make it tough for that demographic

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Speaker 3: in particular. I think we're also seeing people quit at

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Speaker 3: lower rates, not seeing a lot of places that they

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Speaker 3: could move to new jobs with higher pay. So it's

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Speaker 3: really tough to predict, but I think it's obvious to

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Speaker 3: many people that, especially for younger people, but lots of

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Speaker 3: other demographics, there's just going to be fewer opportunities than

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Speaker 3: there were, say, two or three years ago.

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Speaker 2: Oheich.

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Speaker 1: Thank you so much for joining today, and a happy

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Speaker 1: new Year to you. Looking forward to chatting with you

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Speaker 1: again in twenty twenty six. Rohit Chopra of course the

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Speaker 1: former CFPB director, former FTC commissioner, and of course it

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Speaker 1: currently works for an association of the state attorneys general

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Speaker 1: on their Consumer Protection and Affordability Working Group