H.J.Res.59 - Disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to Overdraft Lending: Very Large Financial Institutions. (119th Congress)
Summary
H.J.Res.59 is a joint resolution introduced in the House of Representatives aiming to disapprove a rule submitted by the Bureau of Consumer Financial Protection (BCFP) concerning overdraft lending practices of very large financial institutions. The resolution seeks to nullify the rule, preventing it from taking effect. The rule in question is identified as 89 Fed. Reg. 106768, published on December 30, 2024.
The resolution was introduced by Mr. Hill of Arkansas, along with several co-sponsors, and referred to the Committee on Financial Services. The core of the resolution states that Congress disapproves of the BCFP's final rule and that the rule shall have no force or effect if the resolution is enacted.
Essentially, this is Congress attempting to use its authority to overturn a regulatory action by a federal agency.
Expected Effects
If passed, H.J.Res.59 would prevent the BCFP's rule on overdraft lending for very large financial institutions from taking effect. This means that the existing overdraft lending practices of these institutions would remain in place, without the changes or restrictions that the BCFP rule intended to impose.
The financial institutions would not be subject to the new regulations outlined in the disapproved rule. Consumers would continue to be subject to the current overdraft policies of these institutions.
Potential Benefits
- Financial institutions may benefit from the continuation of existing overdraft lending practices, potentially maintaining revenue streams.
- Opponents of the BCFP rule may view this as a victory against regulatory overreach.
- There may be short-term stability in the financial sector if the new rule is perceived as disruptive.
- Some argue that the existing overdraft practices provide a service to consumers who need short-term credit, even with associated fees.
- Supporters of the resolution may argue it promotes free-market principles by reducing regulatory burden.
Most Benefited Areas:
Potential Disadvantages
- Consumers may continue to face high overdraft fees, potentially disproportionately affecting low-income individuals.
- The BCFP's ability to protect consumers from potentially predatory lending practices would be limited.
- The resolution could set a precedent for Congress overturning agency rules, potentially weakening regulatory oversight.
- The absence of the rule could lead to continued financial instability for some consumers due to overdraft charges.
- The resolution may be seen as prioritizing the interests of large financial institutions over the financial well-being of consumers.
Most Disadvantaged Areas:
Constitutional Alignment
The resolution is an exercise of Congress's legislative power, as granted by Article I, Section 1 of the Constitution, which vests all legislative powers in the Congress. Specifically, it appears to be an invocation of the Congressional Review Act (CRA), which allows Congress to review and disapprove of agency regulations.
The CRA provides a mechanism for Congress to check the power of the executive branch and its agencies. The constitutionality of the CRA itself has been debated, but it has been upheld as a valid exercise of legislative authority. The resolution does not appear to infringe upon any specific constitutional rights or protections.
However, the broader implications for the separation of powers and the balance between legislative and executive authority are relevant considerations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).