S.jres18 - Disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to Overdraft Lending: Very Large Financial Institutions. (119th Congress)
Summary
This document is a joint resolution passed by the US Congress to disapprove a final rule submitted by the Bureau of Consumer Financial Protection (BCFP) concerning overdraft lending practices of very large financial institutions. The resolution specifically targets rule 89 Fed. Reg. 106768, published on December 30, 2024. The resolution states that the rule shall have no force or effect.
Essentially, Congress is using its authority to overturn a regulatory action taken by an executive agency. This action reflects a check on the power of the BCFP and an assertion of congressional oversight in financial regulation.
The resolution was passed during the first session of the One Hundred Nineteenth Congress.
Expected Effects
The immediate effect of this resolution is that the BCFP rule regarding overdraft lending by very large financial institutions will not be implemented. This means that the existing regulations or lack thereof, concerning overdraft fees and practices for these institutions, will remain in place.
Financial institutions will not be subject to the specific requirements outlined in the disapproved rule. Consumers may continue to face existing overdraft fee structures and policies from these large banks.
This action could lead to further legislative or regulatory efforts to address overdraft lending practices in the future.
Potential Benefits
- Potentially reduces compliance costs for very large financial institutions, which they may pass on to consumers in other ways (e.g., lower fees for other services, higher interest rates on savings accounts).
- Prevents potential unintended consequences of the rule that could have negatively impacted consumers or the financial industry.
- Reaffirms Congressional authority over financial regulation and oversight of executive agencies.
- May encourage the BCFP to reconsider its approach and develop a more balanced rule in the future.
- Could lead to a more tailored regulatory approach that considers the specific needs and circumstances of different financial institutions and consumers.
Most Benefited Areas:
Potential Disadvantages
- Consumers may continue to be subject to high overdraft fees from very large financial institutions.
- The lack of regulation could disproportionately affect low-income individuals and those who are more likely to overdraw their accounts.
- Missed opportunity to provide greater transparency and consumer protection in the area of overdraft lending.
- May create uncertainty in the financial industry regarding the future of overdraft lending regulations.
- Could lead to a race to the bottom among financial institutions, with each trying to maximize overdraft fee revenue.
Most Disadvantaged Areas:
Constitutional Alignment
This resolution aligns with Article I, Section 1 of the US Constitution, which vests all legislative powers in Congress. Congress is exercising its power to disapprove a rule made by an executive agency, which falls under its legislative authority.
The resolution also reflects the system of checks and balances, where Congress can oversee and limit the power of the executive branch. This action does not appear to infringe upon any specific individual rights or liberties protected by the Constitution or its amendments.
However, the constitutionality of the underlying BCFP rule is not addressed here, only Congress's power to disapprove it.
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).