diff --git a/hindsight-api-slim/hindsight_api/config_resolver.py b/hindsight-api-slim/hindsight_api/config_resolver.py
index 6b5702855..833d1a25e 100644
--- a/hindsight-api-slim/hindsight_api/config_resolver.py
+++ b/hindsight-api-slim/hindsight_api/config_resolver.py
@@ -172,8 +172,9 @@ async def _load_bank_config(self, bank_id: str) -> dict[str, Any]:
                     # Normalize keys (handle both env var format and Python field format)
                     normalized = normalize_config_dict(config_data)
 
-                    # Only return overrides for configurable fields
-                    return {k: v for k, v in normalized.items() if k in self._configurable_fields}
+                    # Only return active overrides for configurable fields. JSON null is a tombstone
+                    # for "Server Default" in the bank-config UI and should not override defaults.
+                    return {k: v for k, v in normalized.items() if k in self._configurable_fields and v is not None}
         except Exception as e:
             logger.error(f"Failed to load bank config for {bank_id}: {e}")
 
diff --git a/hindsight-api-slim/tests/test_hierarchical_config.py b/hindsight-api-slim/tests/test_hierarchical_config.py
index d9eec79eb..0cb838a6d 100644
--- a/hindsight-api-slim/tests/test_hierarchical_config.py
+++ b/hindsight-api-slim/tests/test_hierarchical_config.py
@@ -5,6 +5,7 @@
 key normalization, API endpoints, validation, and caching.
 """
 
+import json
 import os
 
 import pytest
@@ -37,6 +38,33 @@ async def get_tenant_config(self, context):
         return self.tenant_config
 
 
+class FakeBankConfigBackend:
+    """Minimal backend for ConfigResolver bank-config tests."""
+
+    def __init__(self):
+        self.config: dict[str, object] = {}
+
+    def acquire(self):
+        return FakeBankConfigConnection(self)
+
+
+class FakeBankConfigConnection:
+    def __init__(self, backend: FakeBankConfigBackend):
+        self.backend = backend
+
+    async def __aenter__(self):
+        return self
+
+    async def __aexit__(self, exc_type, exc, tb):
+        return None
+
+    async def fetchrow(self, query, bank_id):
+        return {"config": self.backend.config}
+
+    async def execute(self, query, updates_json, bank_id):
+        self.backend.config.update(json.loads(updates_json))
+
+
 @pytest.mark.asyncio
 async def test_config_key_normalization():
     """Test that env var keys are normalized to Python field names."""
@@ -169,6 +197,46 @@ async def test_config_hierarchy_resolution(memory, request_context):
         await memory.delete_bank(bank_id, request_context=request_context)
 
 
+@pytest.mark.asyncio
+async def test_bank_config_null_consolidation_overrides_use_server_defaults():
+    """JSON null bank overrides should behave like Server Default.
+
+    Regression test for #1619: the dashboard can send null for observation
+    config fields. Those nulls must not flow into consolidation as None.
+    """
+    bank_id = "test-null-consolidation-config-bank"
+    fields = (
+        "consolidation_llm_batch_size",
+        "consolidation_source_facts_max_tokens",
+        "consolidation_source_facts_max_tokens_per_observation",
+        "max_observations_per_scope",
+    )
+    resolver = ConfigResolver(backend=FakeBankConfigBackend())
+    explicit_overrides = {
+        "consolidation_llm_batch_size": 7,
+        "consolidation_source_facts_max_tokens": 2048,
+        "consolidation_source_facts_max_tokens_per_observation": 256,
+        "max_observations_per_scope": 3,
+    }
+
+    await resolver.update_bank_config(bank_id, explicit_overrides)
+    config = await resolver.resolve_full_config(bank_id)
+    for field_name, expected in explicit_overrides.items():
+        assert getattr(config, field_name) == expected
+
+    await resolver.update_bank_config(bank_id, {field_name: None for field_name in fields})
+
+    resolved_config = await resolver.resolve_full_config(bank_id)
+    global_config = resolver._global_config
+    for field_name in fields:
+        assert getattr(resolved_config, field_name) == getattr(global_config, field_name)
+        assert getattr(resolved_config, field_name) is not None
+
+    bank_overrides = await resolver._load_bank_config(bank_id)
+    for field_name in fields:
+        assert field_name not in bank_overrides
+
+
 @pytest.mark.asyncio
 async def test_config_validation_rejects_static_fields(memory, request_context):
     """Test that attempting to override static fields raises ValueError."""