Trump’s ascendancy may spell bad news for consumer protections in the US

But some of the changes face legal challenges, as Republicans push back against policies that have angered the financial industry. The outcome of these battles is just one area where consumers have a lot at stake in the coming year. Here is what I’ll be keeping close tabs on once Donald Trump takes office:

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What will happen to the CFPB?: The US Consumer Finance Protection Bureau was created under President Obama in 2010 in the wake of the 2008 financial crisis. Its addition of guard-rails for retail banking, medical billing and consumer finance are often opposed by the financial industry.

During Trump’s first term, the Supreme Court upheld the president’s authority to fire the agency’s head. So he may dismiss current director Rohit Chopra and install someone unlikely to sustain initiatives like capping credit-card late fees, closing a loophole that allows high overdraft fees and fighting improper medical billing. The agency may even be dismantled.

Will boycotts return?: Under Trump 1.0, there were many calls to boycott Trump products and companies that did business with the Trump family. Shoes.com and Nordstrom’s dropped Ivanka Trump’s fashion line and Under Armour’s chief had to address consumer complaints after he made favourable comments about Trump.

In his second administration, Trump’s cabinet picks of wealthy business owners and other controversial characters could incite a new round of protests. The app formerly known as Twitter, though, may no longer serve as a platform to rally protests, as it’s now owned by Elon Musk and called X.

But Musk, who along with biotech company founder Vivek Ramaswamy is slated to lead Trump’s government-efficiency initiative, may see a backlash to his Tesla brand.

Will the estate tax exemption be extended?: The tax reform legislation enacted in 2017 as part of the Tax Cuts and Jobs Act significantly reduced the federal tax on big estates. But the increase in the basic exclusion amount to $13.99 million for an individual will sunset at the end of 2025, reverting to its base of $5 million if Congress doesn’t intervene.

Trump has promised to reduce income taxes on tips, overtime and Social Security, but he hasn’t indicated whether he would support extending the estate tax exemption. A higher exclusion would be in line with his overall ethos of reducing taxes on individuals. The exemption only affects wealthy Americans, but cutting it in half would impact estate planning in 2025.

Funds distributed during the exemption, even while the owner of the estate is alive, will be held to the currently high basic exclusion amount. That is motivation for those with multimillion-dollar estates to consider gifting funds to heirs by the end of 2025 to shield the money from a potentially higher tax liability starting in 2026.

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Will retirement plans be refreshed?: The SECURE (Setting Every Community Up for Retirement Enhancement) Act 2.0 has been in effect for a few years, but 2025 will usher in the requirement that employers automatically enrol eligible workers into 401(k) or 403(b) plans.

This includes a minimum contribution rate of 3%. Employees can opt out, but the auto-enrol feature will hopefully increase participation and help more Americans prepare for retirement.

But lower-income Americans may not find this move particularly helpful. Some might find it impossible to sacrifice part of a paycheque for a retirement kitty, while others work for employers who don’t offer retiral plans.

While it’s hard to know what the new administration will focus on, a possible bipartisan solution, proposed by economists Teresa Ghilarducci and Trump first-term veteran Kevin Hassett, would make a version of the federal Thrift Savings Plan available to private-sector workers.

Hassett, who served as the head of the Council of Economic Advisors in the first Trump administration, will be returning to the White House as director of the National Economic Council, though it’s uncertain whether he’ll take up the mantle of retirement plans. The proposal would generally be good for Americans’ financial well-being—and it probably would be popular with Trump’s base.

If Trump 2.0 is anything like his first term, then we should expect a frenetic and sometimes-disjointed approach to policymaking. Democrats and consumer advocates will surely fight efforts to halt or roll back consumer protections, but with the US Congress and White House in Republicans’ hands, the deck would be stacked against them. ©Bloomberg

Also read: Mint Primer: Has consumer protection just got weaker?