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 (S.J. Res. 18) introduced in the Senate during the 119th Congress. It aims 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 was introduced on February 13, 2025, and referred to the Committee on Banking, Housing, and Urban Affairs.
Expected Effects
If passed, this resolution would nullify the BCFP's rule on overdraft lending for large financial institutions. This would mean that the specific regulations outlined in the rule (89 Fed. Reg. 106768) would not be enforced. The practical effect would be to maintain the status quo regarding overdraft lending practices for these institutions, potentially leading to continued or altered consumer experiences with overdraft fees.
Potential Benefits
- Potentially reduces compliance costs for large financial institutions, which they may pass on to consumers in other ways.
- May prevent unintended consequences of the BCFP rule that could negatively impact access to banking services for some consumers.
- Could allow financial institutions to innovate with overdraft products without regulatory constraints.
- Might avoid potential disruptions to existing overdraft programs that consumers find valuable.
- Could prevent the BCFP from overstepping its regulatory authority, preserving congressional oversight.
Most Benefited Areas:
Potential Disadvantages
- May leave consumers vulnerable to potentially predatory overdraft lending practices by large banks.
- Could hinder efforts to protect consumers from excessive or unexpected overdraft fees.
- May perpetuate existing inequalities in the financial system, disproportionately affecting low-income individuals.
- Could undermine the BCFP's ability to fulfill its consumer protection mandate.
- Might lead to a lack of transparency and clarity in overdraft lending practices.
Most Disadvantaged Areas:
Constitutional Alignment
The resolution reflects Congress's power to check the authority of executive agencies like the BCFP, aligning with the principle of separation of powers. Article I, Section 1 vests all legislative powers in Congress, implying the power to oversee and disapprove of agency rules. The Congressional Review Act provides a mechanism for such disapproval, which this resolution appears to utilize. However, the constitutionality of the BCFP itself, and the extent of its regulatory authority, has been subject to debate, raising questions about the underlying rule's constitutional validity.
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).