Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Bureau of Consumer Financial Protection relating to the withdrawal of the rule relating to "Consumer Financial Protection Circular 2024-05: Improper Overdraft Opt-In Practices".
- Sponsor
- Rep. Velázquez, Nydia M. [D-NY-7]
- Committees
- Financial Services Committee (primary)
- Last action
- Apr 30, 2026
Bottom line
This resolution seeks to prevent the CFPB from withdrawing its guidance on improper overdraft opt-in practices, thereby maintaining stricter oversight on how banks offer overdraft services and potentially protecting consumers from certain fees.
What it actually does
This joint resolution utilizes the Congressional Review Act (CRA) to disapprove a rule issued by the Bureau of Consumer Financial Protection (CFPB) on May 12, 2025. This CFPB rule had *withdrawn* a previous guidance document, "Consumer Financial Protection Circular 2024-05: Improper Overdraft Opt-In Practices." If enacted, this resolution would nullify the CFPB's withdrawal, thereby reinstating or preserving Circular 2024-05, which aims to regulate how financial institutions obtain consumer consent for overdraft services.
Proponents argue
Proponents argue that disapproving the CFPB's withdrawal is essential for protecting consumers from predatory overdraft fees and deceptive opt-in practices. They contend that Circular 2024-05 provided necessary clarity and enforcement tools to prevent financial institutions from exploiting consumers, especially vulnerable populations, through high-cost overdraft services. Maintaining the circular ensures that consumers are genuinely consenting to overdraft coverage and are not unknowingly incurring significant fees.
Opponents contend
Opponents of this resolution (who would support the CFPB's withdrawal of Circular 2024-05) argue that the original circular imposed undue regulatory burdens on financial institutions, limiting their ability to offer flexible overdraft services that some consumers value. They may contend that the circular was overly prescriptive, stifled innovation, and that market competition or existing regulations are sufficient to protect consumers without the need for additional, potentially burdensome, guidance.
The bill text is extremely short and straightforward, requiring less than a minute to read. However, understanding its implications requires familiarity with the underlying CFPB rules and the Congressional Review Act process.
Section 1
Congressional Disapproval of CFPB Rule Withdrawal
This provision states that Congress disapproves of the rule issued by the Bureau of Consumer Financial Protection (CFPB) on May 12, 2025 (90 Fed. Reg. 20084), which had withdrawn a previous CFPB guidance document, Circular 2024-05. By disapproving this withdrawal, the resolution aims to ensure that Circular 2024-05, which addresses "Improper Overdraft Opt-In Practices," remains in effect. The operative effect is to maintain federal oversight on how financial institutions obtain consumer consent for overdraft services.
Supporters argue
Supporters argue that maintaining Circular 2024-05 is essential for consumer protection, ensuring that financial institutions cannot engage in practices that trick or coerce consumers into overdraft services, which often come with significant fees. They believe it promotes transparency and fair dealing in financial services.
Critics contend
Opponents of the resolution (i.e., those who support the CFPB's withdrawal) contend that Circular 2024-05 was overly restrictive, potentially limiting consumer choice for overdraft services and imposing unnecessary compliance costs on financial institutions. They might argue that the market should dictate these practices, or that existing regulations are sufficient.
Tradeoffs
The resolution highlights the tension between consumer protection from potentially harmful financial practices and the desire of financial institutions for regulatory flexibility and the ability to offer a wider range of services, even if those services carry risks for some consumers.
The resolution disapproves the CFPB's rule that withdrew Circular 2024-05, effectively preserving the original circular on improper overdraft opt-in practices.
Section 1
Why it matters:This is standard legislative practice for Congressional Review Act (CRA) resolutions, which often refer to specific agency actions by their Federal Register citations. The layered nature of 'disapproving a withdrawal' is a consequence of the regulatory action being targeted, not an intentional burial by the bill's drafters.
Case for: Supporters argue that this precise targeting is necessary to reverse an agency action that they believe undermines consumer protections. It represents a direct exercise of congressional oversight to maintain a specific regulatory stance.
Case against: Critics might argue that such a layered approach can be confusing for the public and that Congress should legislate directly rather than using the CRA to manage complex regulatory reversals, which can obscure the actual policy outcome.
Estimated impact: The impact is the continued enforcement of Circular 2024-05, which aims to prevent improper overdraft opt-in practices, potentially saving consumers billions in fees annually and increasing compliance costs for financial institutions.