Todd Zywicki

Todd Zywicki

  • Senior Scholar
  • Senior Fellow, F. A. Hayek Program

Todd Zywicki is a senior scholar and senior fellow with the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University and Foundation Professor of Law at George Mason University School of Law. He specializes in bankruptcy, contracts, commercial law, business associations, law and economics, and public choice and the law.

Professor Zywicki has testified before Congress on consumer bankruptcy and consumer credit, and he frequently commentates in print and broadcast media, including the Wall Street Journal, the New York Times, the Washington Post, Forbes, the Atlantic, Nightline, NBC Nightly News, PBS Newshour, Fox Business, CNN, CNBC, Bloomberg News, BBC, ABC Radio, and The Diane Rehm Show. He writes for the legal blog the Volokh Conspiracy and is an editor of the Supreme Court Economic Review.

Previously, Zywicki was director of the Office of Policy Planning at the Federal Trade Commission (FTC) and taught at Vanderbilt University Law School, Georgetown University Law Center, Boston College Law School, and Mississippi College School of Law.

Zywicki received his JD from the University of Virginia, his MA in economics from Clemson University, and his BA in economics from Dartmouth College.

Published Research

Todd Zywicki, Robert L. Clarke | Apr 01, 2014
In response to the financial crisis that began in 2008, in 2010 President Obama signed into law the Wall Street Reform and Consumer Protection Act, commonly referred to as the “Dodd-Frank Act." A “centerpiece of the [new law] was the creation of the Consumer Financial Protection Bureau (“CFPB”),” which was established in response to the perception of widespread failures in the federal consumer protection regime with respect to financial products and the belief that these regulatory failures contributed to the financial crisis.
G. Michael Flores, Todd Zywicki | Nov 04, 2013
The Consumer Financial Protection Bureau (CFPB) released its initial analysis of bank overdraft programs in a June 2013 white paper. We review the report and provide commentary on its methodology, its preliminary conclusions, and gaps in its analysis. We provide a synopsis of findings from previous third-party analyses to lay the foundation for our response, and then we follow the paper’s organizational structure as we discuss specific points it makes. We also identify the larger policy questions of access to credit, alternative sources of credit, and the economic benefit attained by the use of overdrafts. These questions must be addressed before the bureau can make any findings of consumer harm that would justify new regulation and the resultant unintended consequences of limiting options to the consumers the CFPB is structured to protect.
Todd Zywicki | Apr 2013
Proponents of the CFPB argue that extreme independence is justified to insulate it from political pressures. But the history of regulation teaches that insulation can be isolation, resulting in inefficient regulation. Scholars over the past several decades have identified common pathologies associated with bureaucratic behavior. The CFPB’s structure virtually guarantees the manifestation of those pathologies in practice: excessive risk aversion, agency imperialism, and tunnel vision. Indeed, it is as if the CFPB were an agency frozen in amber during the Nixon Administration and thawed out today, completely unaware of the past several decades’ lessons on how to structure an effective regulatory strategy.
Todd Zywicki, Nick Tuszynski | May 09, 2012
Regulators cannot wish away consumers’ need for credit, and eliminating access to overdraft protection will not correspondingly eliminate this need.

Working Papers

Adam C. Smith, Todd Zywicki | Mar 11, 2014
The Consumer Financial Protection Bureau (CFPB) is one of the most powerful and least accountable regulatory agencies in American history. Immune from budgetary oversight by Congress and headed by a single director whom the president cannot remove except under special circumstances, the agency wields unconstrained, vaguely defined powers to regulate virtually every consumer and small business credit product in America (Zywicki 2013a). In part, the CFPB has justified its ongoing intervention into financial credit markets based on a prior belief in the inability of consumers to competently weigh their decisions. This belief is founded on research conducted in the area of behavioral economics, which shows that people are prone to a variety of errors in their decision-making.
Robert L. Clarke, Todd Zywicki | Nov 21, 2013
The Consumer Financial Protection Bureau (CFPB) is considering new regulation of payday lending and bank overdraft protection. The Dodd-Frank Act, which established the CFPB, recognizes that consumers benefit from competition among providers of consumer credit products. That law requires the CFPB to preserve fair competition by providing consistent regulatory treatment of similar products offered by both bank and nonbank lenders. We illustrate how this mandate for fair competition applies to the regulation of payday lending and bank overdraft protection, products that are offered by different entities but attract an overlapping customer base, compete with each other directly, and raise similar consumer protection concerns. Unequal regulation would provide a competitive advantage for one product over another, resulting in reduced choice and higher prices for consumers, without a corresponding increase in consumer protection. Therefore, as the CFPB considers new regulation of these products, it should be careful to regulate them similarly to preserve fair competition.
Todd Zywicki | Jan 15, 2013
This paper describes the current economic and regulatory landscape for prepaid cards. The market appears to be robustly competitive, as recent years have seen declining costs and increasing functionality as well as entry of major players such as American Express and several large banks. Nor is there any evidence that consumers systematically err in the cards that they choose. Absent a demonstrable competitive market failure or systematic consumer abuse, prescriptive regulation of the terms and substance of prepaid cards would likely have unintended consequences that would exceed the benefits to consumers. On the other hand, there are some regulations that might be enacted that could promote competition and consumer welfare in this rapidly evolving market.
Todd Zywicki | Oct 01, 2012
In “The Consumer Financial Protection Bureau: Savior or Menace?” Todd Zywicki provides a short history of the CFPB and of consumer credit regulation in America, including many of the lessons researchers have learned from decades of bureaucratic design. The CFPB’s structure, as Zywicki notes, ignores many of these lessons. The paper outlines several known problems that often plague bureaucratic organizations and explains how the CFPB will be particularly vulnerable to these failings unless it sees significant reform.

Policy Briefs

Todd Zywicki, Robert Sarvis | Jan 14, 2013
Government regulators proposing restrictions on specific forms of consumer credit all too often ignore the reality of how and why consumers use credit. They also ignore lenders’ legitimate reasons for pricing their services as they do; consumers’ legitimate reasons for choosing the financing options they do; the risks consumers face when credit offerings are made unavailable to them; and the many consumers who use the particular forms of consumer credit responsibly and effectively.
Todd Zywicki, Astrid Arca | Jan 11, 2010
In the wake of the financial crisis, Congress is considering new regulations on non-traditional lending products like payday lending, although there is no evidence that such products were related in…
Todd Zywicki, Gabriel Lucjan Okolski | Nov 2009
One can hardly turn on a TV without seeing commercials in which cash-strapped individuals bring their car titles to a lender for quick and easy loans. While auto title lending may appear to be…
Stefanie Haeffele-Balch, Todd Zywicki | Oct 2009
In an effort to correct problems that led to the current housing and mortgage crisis, policy makers have proposed a new Consumer Financial Protection Agency (CFPA) that would have the authority to…

Testimony & Comments

Todd Zywicki | Jul 10, 2012
Much of the government’s political intervention in the bankruptcy cases appears to have been motivated to benefit the UAW rather than the companies themselves over U.S. taxpayers, who put billions of dollars at risk to fund the bailouts.
Todd Zywicki, Asa Skinner | Jun 28, 2012
Profits gained from overdraft protection have been used by banks to expand services and accessibility for customers both rich and poor, and limiting overdraft protection may threaten many of the benefits that it makes possible.
Todd Zywicki | May 24, 2011
Todd Zywicki testified before the House Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs.
Todd Zywicki | Feb 26, 2010
In this testimony before the House Financial Services Committee, Prof. Todd Zywicki discusses the negative impact of recently-enacted and contemplated future legislation in interfering with a…

Research Summaries & Toolkits

Expert Commentary

By Todd Zywicki, Geoffrey Manne, Julian Morris |
Jun 09, 2014

Payment cards are a marvel of modern civilization. Both consumers and retailers benefit from payments that are safer and quicker than cash or cheque – and from the fact that consumers are not limited by the amount of cash in their wallet or bank account. Brits get this, which is why Britain has among the highest rates of payment card use in the world.
Apr 06, 2014

A recent report conducted through internal investigation at the Consumer Financial Protection Bureau (CFPB) found multiple instances of employee discrimination and harassment. Investigator Misty Raucci claimed, “I found that the general environment in Consumer Response is one of exclusion, retaliation, discrimination, nepotism, demoralization, devaluation, and other offensive working conditions which constitute a toxic workplace for many of its employees.”…
Sep 03, 2013

Last August, years of expensive litigation and a comprehensive evidentiary process culminated in a meeting of the minds among warring litigants to antitrust litigation that challenged the practice by which credit card networks set “interchange” fees (the fee paid by merchants to card issuers when consumers pay by credit card).  On September 12 of this year, the settlement goes before the judge for a final approval—approval that is highly appropriate despite the high-profile efforts of some disenchanted retailers to orchestrate opposition to the settlement.
Jul 21, 2013

With the Senate’s confirmation of Richard Cordray as director of the Consumer Financial Protection Bureau the agency’s authority to oversee lending practices, in limbo for the two years of its existence, has been affirmed.
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