McWatters now said to be out and Zywicki front-runner for CFPB

by Jeff Sovern

So says C. Ryan Barber in the National Law Journal.  Things shift quickly in the Trump White House. The report is attributed to two unnamed sources.  Zywicki would be a formidable candidate. He is smart, a prolific writer, and served as Director of the Office of Policy Planning at the Federal Trade Commission. His downside–and it's a huge one–is his ideological straitjacket. It was on display in his February op-ed in the WSJ, The CFPB Could Be a Force for Good. That's an encouraging title–at least he's not calling the Bureau a sad sick joke–but here's an excerpt:

During Richard Cordray’s tenure as director of the Consumer Financial Protection Bureau, the CFPB pummeled American consumers and the economy while doing little to promote financial stability. The pain was especially acute for low- and middle-income consumers who lost access to credit cards, faced higher bank fees and reduced access to free checking, and found it harder and costlier to obtain mortgages, especially as first-time homebuyers. * * *

* * * 

American families know better than bureaucrats what financial products best meet their needs. One justification for the CFPB’s broad scope of authority was to enable it to oversee the entire consumer-credit ecosystem and break down the traditional regulatory silos that focus on who issues financial products instead of how consumers use them. The CFPB should concentrate its efforts on empowering families instead of banning products or using trendy behavioral-economics theories to “nudge consumers toward decisions central planners favor. * * * 

Mr. Cordray’s CFPB viewed consumers as too dumb, irrational or vulnerable to make their own decisions about whether to enter into a contract with an arbitration clause, take out a payday loan, or bargain with a car dealer over an auto loan. * * * 

Because Zywicki has written so much, if he is the nominee, we can expect opponents to go through his writings carefully looking for matters to question him about during confirmation hearings. Some of his writings can be expected to be controversial, and I am among the people who have offered a critique.

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