[Federal Register Volume 71, Number 128 (Wednesday, July 5, 2006)]
[Rules and Regulations]
[Pages 38076-38085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-10234]



[[Page 38076]]

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DEPARTMENT OF JUSTICE

28 CFR Part 58

[Docket No. EOUST 100]
RIN 1105-AB17


Application Procedures and Criteria for Approval of Nonprofit 
Budget and Credit Counseling Agencies and Approval of Providers of a 
Personal Financial Management Instructional Course by United States 
Trustees

AGENCY: Executive Office for United States Trustees, Justice.

ACTION: Interim final rule.

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SUMMARY: This interim final rule (``rule'') sets forth the proposed 
application procedures to be used by United States Trustees for 
approval of nonprofit budget and credit counseling agencies 
(``agencies'') and for approval of providers of a personal financial 
management instructional course (``providers'') under the Bankruptcy 
Abuse Prevention and Consumer Protection Act of 2005 (``BAPCPA''). 
Under the BAPCPA, individual debtors are required to consult with 
approved agencies to receive a briefing on the opportunities for credit 
counseling and a budget analysis, within 180 days before filing for 
bankruptcy relief, and to consult with approved providers of a personal 
financial management instructional course, after filing for relief, 
before receiving a discharge of their debts. The BAPCPA also sets forth 
procedures and standards for the United States Trustees to use in 
approving agencies and providers for subsequent inclusion on a publicly 
available agency list and provider list in each federal judicial 
district where they are deemed qualified to counsel or instruct 
individuals.

DATES: Effective Date: July 5, 2006.
    Comment Date: Comments due by September 5, 2006.

ADDRESSES: Comments on the rule should be submitted by e-mail to 
[email protected], by telefax to 202-514-4100, or by 
postal mail to: Executive Office for United States Trustees 
(``EOUST''), Credit Counseling Application Processing, 20 Massachusetts 
Ave, 8th floor, Washington, DC 20530. To ensure proper handling, please 
reference EOUST Docket No. 100 on your correspondence. You may view an 
electronic version of this proposed rule at www.regulations.gov. You 
may also comment via the Internet using the www.regulations.gov comment 
form for this regulation. When submitting comments electronically you 
must include EOUST Docket No. 100 in the subject box. Comments filed 
after the end of the comment period may be considered to the extent 
feasible. Comments received are public records.

SUPPLEMENTARY INFORMATION: This rule implements the Bankruptcy Abuse 
Prevention and Consumer Protection Act of 2005 (enacted April 20, 
2005), Public Law 109-8, sections 106(a), 119 Stat. 37 (codified at 11 
U.S.C. 109(h)) and 106(e)(1), 119 Stat. 38 (codified at 11 U.S.C. 
111(a)-(e)). Under the BAPCPA, which became effective on October 17, 
2005, individual debtors are required to consult with approved agencies 
to receive a briefing on the opportunities for credit counseling and a 
budget analysis, within 180 days before filing for bankruptcy relief. 
11 U.S.C. 109(h)(1). Debtors are also required to participate in a 
personal financial management instructional course with approved 
providers to receive instruction on how to establish and maintain a 
budget, how to manage one's money, and how to use credit wisely. The 
debtor will not be granted a discharge if this instruction is not 
obtained. 11 U.S.C. 727(a)(11), 1328(g)(1), 1141(d)(3)(c).
    11 U.S.C. 111(b) provides that, in applicable jurisdictions, the 
United States Trustee shall only approve an agency or provider after 
the United States Trustee has thoroughly reviewed, under the standards 
set forth in BAPCPA, the qualifications of the agency or provider and 
the services that will be offered by such agency or provider, and has 
determined that such agency or provider fully satisfies the standards. 
The United States Trustee may require such agency or provider that has 
sought approval to provide information with respect to such review.
    According to the new Bankruptcy Code provision, 11 U.S.C. 111, the 
United States Trustee shall only approve an agency that demonstrates 
that it will provide qualified counselors, maintain adequate provision 
for safekeeping and payment of client funds, provide adequate 
counseling with respect to client credit problems, and deal responsibly 
and effectively with other matters relating to the quality, 
effectiveness, and financial security of the services it provides.
    Under 11 U.S.C. 111, the United States Trustee shall only approve a 
provider that demonstrates that it will provide trained personnel with 
adequate experience and training in providing effective instruction and 
services, provide learning materials and teaching methodologies 
designed to assist debtors in understanding personal financial 
management, provide adequate facilities situated in reasonably 
convenient locations where the instructional course is offered, except 
that such facilities may include the provision of such instructional 
course by telephone or through the Internet, if such instructional 
course is effective, and prepare and retain reasonable records to 
permit evaluation of the effectiveness of such instructional course by 
the EOUST and the United States Trustee.
    As Congress stated in its conference report, ``the purpose of the 
bill is to improve bankruptcy law and practice by restoring personal 
responsibility and integrity in the bankruptcy system and ensure that 
the system is fair for both debtors and creditors * * * the bill 
requires debtors to receive credit counseling before they can be 
eligible for bankruptcy relief so that they will make an informed 
choice about bankruptcy, its alternatives, and consequences * * * the 
bill also penalizes a creditor who unreasonably refuses to negotiate a 
pre-bankruptcy debt repayment plan with a debtor.'' H.R. Rep. 109-31, 
pt. 1 at 2.
    By submitting an application, an agency or provider is declaring 
under penalty of perjury that the information on the application is 
true, correct, accurate, and complete.
    The remaining requirements set forth in the amending regulatory 
text are self-explanatory. In determining whether an agency or provider 
meets the qualifications for approval and inclusion on the approved 
list, the EOUST and United States Trustee may rely on the application 
submitted by the agency or provider.
    The application form that credit counseling agencies must use to 
apply for approval under these regulations is EOUST-CC1, ``Application 
for Approval as a Nonprofit Budget and Credit Counseling Agency,'' 
which is available on the EOUST's Web site along with the instructions. 
The application form that providers of an instructional course must use 
to apply for approval under these regulations is EOUST-DE1, 
``Application for Approval of Provider of a Personal Financial 
Management Instructional Course,'' which is also available on EOUST's 
Web site along with the instructions. Completed and signed credit 
counseling application forms should be mailed to the EOUST, Credit 
Counseling Application Processing, 20 Massachusetts Ave., 8th Floor, 
Washington, DC 20530. Completed and signed debtor education provider 
application forms should be mailed to the EOUST, Debtor Education 
Processing, 20 Massachusetts Ave. 8th

[[Page 38077]]

Floor, Washington, DC 20530. Applicants should refer to the EOUST's Web 
site (http://www.usdoj.gov/ust) to determine the current mailing 
address at the time they submit subsequent applications.

Executive Order 12866

    This rule has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review'' section 1(b), 
The Principles of Regulation. The Department has determined that this 
rule is a ``significant regulatory action'' and accordingly this rule 
has been reviewed by the Office of Management and Budget.
    The Department has also assessed both the costs and benefits of 
this rule as required by section 1(b)(6) and has made a reasoned 
determination that the benefits of this regulation justify its costs. 
The costs considered in this regulation include the costs of submission 
of applications required if an agency or provider wishes to be approved 
for inclusion on the approved list. Costs considered also include the 
cost of establishing and maintaining the approved list in each Federal 
judicial district. In an effort to minimize the applicant's burden, the 
application keeps the number of items on the application to a minimum.
    The costs to applicants will be minimal. The only anticipated costs 
are the photocopying and mailing of the requested records, along with 
the salaries of the employees who complete the applications equaling 
approximately $500 per application for agencies, and $300 per 
application for providers. These costs are inherent in the 
qualification process mandated by Congress. Those applying for approval 
as credit counseling agencies must also obtain a surety bond in the 
amount of two percent of the agency's prior year's gross disbursements 
made from trust accounts or equal to the average daily balance 
maintained in all trust accounts for the six months prior to submission 
of the application. In addition, credit counseling agencies must obtain 
employee fidelity insurance that equals fifty percent of the surety 
bond. Agencies are entitled to receive a credit for any state bonds 
already obtained.
    The number of applicants that will ultimately apply is unknown, 
though the EOUST believes the number may reach approximately eight 
hundred applicants for agencies and eight hundred for providers. The 
annual hour burden on agencies is estimated to be ten (10) hours, and 
the annual hour burden on providers is estimated to be eight (8) hours. 
This estimate is based on consultations with individuals in the credit 
counseling and debtor education industries and from the experience of 
applicants who completed the initial applications.
    The benefits of the rule clearly outweigh the costs because the 
costs are the lowest costs feasible to comply with the requirement that 
a list be established as required pursuant to Public Law No. 109-8, 
section 106(e)(1).

Executive Order 13132

    This rule will not have substantial, direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Therefore, in accordance with Executive Order 
13132, it is determined that this rule does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

Paperwork Reduction Act

    The information collection requirements contained in this rule are 
currently under pending review by the Office of Management and Budget 
(OMB) in accordance with the Paperwork Reduction Act of 1995, 44 U.S.C. 
3501-3520, and assigned OMB control number 1105-0084, for the 
``Application for Approval as a Nonprofit Budget and Credit Counseling 
Agency,'' form number EOUST-CC1. The information collection in 
connection with the ``Application for Approval as a Provider of a 
Personal Financial Management Instructional Course,'' form number 
EOUST-DE1, has been assigned OMB control number 1105-0085. The 
Department notes that full notice and comment opportunities were 
provided to the general public through the Paperwork Reduction Act 
process, and that the applications and associated requirements were 
modified to take into account the concerns of those who commented in 
this process.
    Further comments and suggestions on these collections should be 
directed to the Office of Management and Budget, Office of Information 
and Regulatory Affairs, Attention Department of Justice Desk Officer, 
Washington, DC 20503. Additionally, comments may be submitted to OMB 
via facsimile to (202) 395-5806.
    Comments should address one or more of the following four points: 
(1) Evaluate whether the collections are necessary for the proper 
performance of the functions of the United States Trustee, including 
whether the information will have practical utility; (2) evaluate the 
accuracy of the agency or provider's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) enhance the quality, utility, and 
clarity of the information to be collected; and (4) minimize the burden 
of the collection of information on those who are to respond, including 
through the use of appropriate automated, electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology (e.g., permitting electronic submission of responses).
    The form ``Application for Approval as a Nonprofit Budget and 
Credit Counseling Agency'' EOUST-CC1, is required to evaluate whether 
the applicants met the established qualifications for credit 
counseling. The respondents are credit counseling agencies who seek to 
counsel individuals before they file bankruptcy. The number of 
applicants for the next year is unknown, though the EOUST estimates 
there will be approximately 800 applicants, who will complete one 
application, or a renewal application if submitted previously. The 
estimated burden imposed on the applicant is ten hours, each, totaling 
8,000 estimated annual burden hours.
    The form ``Application for Approval as a Provider of a Personal 
Financial Management Instructional Course,'' EOUST-DE1, is required to 
evaluate whether the applicants met the established qualifications for 
providers of a personal financial management instructional course. The 
respondents are providers who seek to educate individuals after they 
file bankruptcy. The number of applicants for the next year is unknown, 
though EOUST estimated there may be approximately 800 applicants, who 
will complete one application, or a renewal application if submitted 
previously. The estimated burden imposed on the applicant is eight 
hours, each, totaling 6,400 estimated annual burden hours.

Regulatory Flexibility Act

    This interim rule does not fall within the definition of ``rule'' 
in the Regulatory Flexibility Act, 5 U.S.C. 601(2) because there is 
good cause for not publishing it as a general notice of proposed 
rulemaking pursuant to section 553(b) of the Administrative Procedure 
Act.

Unfunded Mandates Reform Act of 1995

    This rule does not require the preparation of an assessment 
statement in accordance with the Unfunded Mandates Reform Act of 1995, 
2 U.S.C.

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1531. This rule does not include a Federal mandate that may result in 
the annual expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of more than the annual threshold 
established by the Act ($123 million in 2005, adjusted annually for 
inflation). Therefore, no actions were deemed necessary under the 
provisions of the Unfunded Mandates Reform Act of 1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100,000,000 or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based companies to 
compete with foreign-based companies in domestic and export markets.

Administrative Procedure Act, 5 U.S.C. 553

    This rule provides that nonprofit budget and credit counseling 
agencies and providers of a personal financial management instructional 
course desiring to be included on a publicly available list of agencies 
or providers deemed qualified to counsel or instruct debtors in each 
federal judicial district shall submit a specified application to the 
United States Trustee. Under the new Bankruptcy Code provisions, an 
agency or provider may initially be approved for a period of time not 
to exceed six months. Agencies or providers must then re-apply for 
approval annually. In order to have a sufficient number of qualified 
agencies and providers operating for debtors to receive the requisite 
credit counseling and debtor education, the United States Trustees must 
rapidly gather information about agencies and providers through an 
application process. This information must be gathered with enough time 
to allow the United States Trustee to review the application materials 
in order to approve only qualified agencies and providers. Without this 
information, the United States Trustee will be unable to perform its 
Congressionally mandated duties.
    Existing agencies and providers were approved for a six-month 
probationary period beginning on September 16, 2005. In light of the 
imminent expiration of the six-month probationary period for a large 
group of initially approved agencies and providers, the Department has 
determined that there is ``good cause'' to implement this application 
process immediately, and that delaying the implementation in order to 
provide the Administrative Procedure Act's normal pre-promulgation 
notice-and-comment period would be impracticable and contrary to the 
public interest. 5 U.S.C. 553(b)(B). This is especially true given that 
the public has already had an opportunity to comment during the 
Paperwork Reduction Act review process for the applications and that 
the Department did make modifications pursuant to public commenters' 
suggestions.
    For the same reasons, the Department also finds ``good cause'' for 
exempting this rule from the provision of the Administrative Procedure 
Act providing for a delayed effective date. U.S.C. 553(d). Delaying the 
opportunity for agencies and providers to submit an application and to 
seek to be included on the approved list would be contrary to the 
public interest since there must be sufficient agencies to offer 
services after the six month probationary term expires and without the 
availability of approved agencies, individuals may not have access to 
bankruptcy relief. In addition, without the availability of approved 
providers, debtors may not be able to obtain a discharge of debts 
because the personal financial management instructional course is 
mandatory before a discharge may be granted. In order for the United 
States Trustee to evaluate the qualifications of the agencies and 
providers, an application must be available for the agencies and 
providers to complete.
    The Department welcomes post-promulgation comments regarding this 
interim final rule including the applications and appendices, which can 
be viewed at the EOUST's Web site at http://www.usdoj.gov/ust, and will 
consider those comments carefully in continuing to review the 
application process in the future. The Department also notes that it 
will publish more comprehensive regulations later this year through a 
notice of proposed rulemaking with full opportunity for public notice 
and comment.

Privacy Act Statement.

    Section 111 of title 11, United States Code, authorizes the 
collection of this information. The primary use of this information is 
by the Executive Office for United States Trustees to approve nonprofit 
budget and credit counseling agencies and to approve providers of 
personal financial management instructional courses. Additional 
disclosure of the information may be to district and regional offices 
of each United States Trustee. The information will not be shared with 
any other agencies unless allowed by law.
    Public Law 104-134 (April 26, 1996) requires that any person doing 
business with the federal government furnish a Social Security Number 
or Tax Identification Number. This is an amendment to title 31, section 
7701. Furnishing the Social Security Number, as well as other data, is 
voluntary, but failure to do so may delay or prevent action on the 
application.

List of Subjects in 28 CFR Part 58

    Administrative practice and procedure, Bankruptcy, Credit, Debts.


0
Accordingly, for the reasons set forth in the preamble, part 58 of 
chapter I of Title 28 of the Code of Federal Regulations is amended as 
follows:

PART 58--[AMENDED]

0
1. The authority citation for part 58 is revised to read as follows:

    Authority: 5 U.S.C. 301; 28 U.S.C. 509, 510, 586; 11 U.S.C. 
109(h), 111, 727(a)(11), 1328(g)(1), 1141(d)(3)(c).


0
2. Add Sec. Sec.  58.15, 58.16, and 58.17 to read as follows:


Sec.  58.15  Qualifications for approval as a nonprofit budget and 
credit counseling agency.

    (a) Definition of agency. As used in this section the term 
``agency'' means nonprofit budget and credit counseling agency.
    (b) Qualifications. To be included on the list of approved 
nonprofit budget and credit counseling agencies under 11 U.S.C. 111 an 
agency shall meet the qualifications set forth in paragraphs (d) 
through (i) of this section. An agency shall continuously meet these 
qualifications in order to remain included on this list when the list 
is updated thereafter.
    (c) Preemption. Nothing contained in these regulations or the 
related application, appendices or instructions is intended to preempt 
any applicable law or regulation governing the conduct or operations of 
an agency.
    (d) Structure and organization. A nonprofit budget and credit 
counseling agency must:
    (1) Be organized and operated as a nonprofit entity;
    (2) Be in compliance with all applicable laws and regulations of 
the United States and each state, commonwealth, district, or territory 
of the United States in which the agency conducts credit counseling 
services;

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    (3) Have an independent board of directors the majority of which:
    (i) Are not employed by such agency; and
    (ii) Will not directly or indirectly benefit financially from the 
outcome of the counseling services provided by such agency;
    (4) Ensure that no member of the board of directors or trustees, 
officer, manager, employee, counselor, or agent is a United States 
Trustee Program employee, a panel or standing trustee, a Federal judge, 
a Federal court employee, a certified public accountant that performs 
audits of the agency's trust accounts, or a person with a financial or 
familial connection to the United States Trustee Program.
    (5) Avoid any conduct or transactions that generate or create the 
appearance of generating a private benefit for any individual or group 
related or connected to the Agency.
    (e) Fees. If a fee is charged for counseling services, charge a 
reasonable fee, and provide services without regard to ability to pay 
the fee; the agency's criteria for providing services without a fee or 
at a reduced rate must be provided to the United States Trustee. In 
addition, an agency shall:
    (1) Have sufficient computer capabilities or secure access to issue 
certificates of completion of credit counseling in conformance with the 
directives established by the EOUST;
    (2) Not withhold a certificate of counseling completion because of 
a client's inability to pay;
    (3) Advise the client of the fee schedule before services are 
provided and inform the client that services are available for free or 
at a reduced rate based on a client's ability to pay;
    (4) Issue a certificate to any client who completes credit 
counseling and a budget analysis, regardless of whether a client agrees 
to participate in a debt management plan and without regard to the 
client's ability to pay;
    (5) Issue the certificate within one business day to a client after 
completion of the required counseling or upon the earlier of the 
following:
    (i) A request by a client for the issuance of a certificate; or
    (ii) The completion or termination of a counseling session, which 
may include the administration of a debt management plan;
    (6) Not charge a separate fee for the issuance of a certificate of 
counseling unless the agency has clearly disclosed such fee before the 
initial credit counseling session;
    (7) Issue a certificate to each spouse whether counseling was 
provided individually or in a joint session;
    (8) Maintain adequate records to issue replacement certificates and 
to verify the authenticity of certificates filed by bankruptcy debtors;
    (9) Provide full disclosures to a client, including funding 
sources, counselor qualifications, possible impact on credit reports, 
the cost of services to be paid by the client and how such costs will 
be paid, before services are rendered and regardless of whether the 
client enters into a debt management plan.
    (f) Standards for counseling and counselors. Agencies and credit 
counselors shall not, unless otherwise authorized by law, provide legal 
advice on any matter. Agencies and credit counselors shall:
    (1) Provide adequate briefings, budget analysis, and credit 
counseling services to clients lasting an average of 60 to 90 minutes 
in length that include an outline of available counseling opportunities 
to resolve a client's credit problems, an analysis of the client's 
current financial condition, discussion of the factors that caused such 
financial condition, and assistance in developing a plan to respond to 
the client's problems without incurring negative amortization of debt;
    (2) Provide trained counselors who receive no commissions or 
bonuses based on the outcome of the counseling services provided by 
such agency, and who have adequate experience, and have been adequately 
trained to provide counseling services to individuals in financial 
difficulty, including the matters described in sub-paragraph (1) of 
this paragraph. A counselor shall be deemed to have adequate training 
and experience to provide credit counseling and budget analysis if the 
counselor is accredited or certified by a recognized independent 
organization, or has successfully completed a course of study 
acceptable to the United States Trustee and has worked a minimum of six 
months in a related area, including personal finance, budgeting, and 
debt management. The United States Trustee Program does not endorse any 
specific course or certification program;
    (3) Demonstrate adequate experience and background in providing 
credit counseling, which means, at a minimum, that an agency must:
    (i) Have experience in providing credit counseling for the previous 
two years. Alternatively, if an agency fails to meet the two-year 
requirement, the agency must currently employ in each office location 
that serves clients at least one office supervisor with experience and 
background in providing credit counseling for no less than two of the 
five years preceding the relevant application date, including only 
experience obtained on or after January 1, 2003; and
    (ii) If an agency offers telephone or Internet credit counseling 
services, the agency must, in addition to all other requirements, 
demonstrate sufficient experience and proficiency in designing and 
providing such services over the telephone and/or Internet, including 
verification procedures to identify the person receiving the counseling 
services and to ensure that the counseling services are properly 
completed.
    (g) Activity report. Upon application for annual approval, the 
agency must furnish an estimate of the information requested in 
Appendix E, ``Activity Report for Approved Agencies,'' of the 
application projected to the end of either the probationary period or 
annual period. Within thirty (30) days after the completion of either 
the probationary period or annual period, the agency must furnish an 
amended Appendix E which includes the actual information.
    (h) Agency declarations and acknowledgments. (1) The agency's 
president, chairman, trustee, or other authorized official is required 
to declare, by signing the application, that such individual is 
authorized to complete the application on behalf of the agency; that 
such individual has read and knows the contents of the application and 
all enclosures and attachments submitted; and that such individual 
affirms under penalty of perjury that all of the representations and 
statements contained therein are true and correct to the best of such 
individual's knowledge, information, and belief;
    (2) By executing and submitting the ``Application for Approval as a 
Nonprofit Budget and Credit Counseling Agency,'' the agency 
acknowledges and agrees to abide by the prohibitions, limitations, and 
obligations set forth in Appendix A, ``Acknowledgments, Agreements, and 
Declarations in Support of Application for Approval as a Nonprofit 
Budget and Credit Counseling Agency,'' of the application which 
include, but are not limited to, the following:
    (i) Making all records relating to the agency's compliance with 11 
U.S.C. 111 available to the United States Trustee and EOUST upon 
request and cooperating with the United States Trustee and EOUST for 
any scheduled or unscheduled on-site visits and customer service 
audits;
    (ii) Cooperating with the United States Trustee and the EOUST in 
timely responding to any questions or inquiries concerning the agency's 
operations and services;

[[Page 38080]]

    (iii) Not excluding a creditor from a debt management plan because 
the creditor declines to make a ``fair share'' contribution to the 
agency;
    (iv) Agreeing that any forms, agreements, contracts, or other 
materials provided to a client will not limit the client's right to 
seek damages against an agency as provided for in 11 U.S.C. 111(g)(2);
    (v) Conducting a state and Federal criminal background check at 
least every five years for each person providing credit counseling 
services, if such criminal background check is authorized under state 
law, and not employing as a counselor anyone who has been convicted of 
any felony, or a crime involving fraud, dishonesty, or false 
statements, unless the United States Trustee determines, upon review 
and in his or her discretion, circumstances warrant a waiver of this 
employment requirement. The state criminal background check shall be 
conducted in the state where the counselor resides. If a criminal 
background check is not authorized by state law, the agency shall 
obtain a sworn statement from each counselor, at least every five 
years, which attests to whether the counselor has been convicted of any 
felony or a crime involving fraud, dishonesty, or false statements;
    (vi) Referring clients for counseling services only to agencies 
that are approved by the United States Trustee;
    (vii) Complying with the EOUST's directions on approved 
advertising, which is located in Appendix A to the application;
    (viii) Not disclosing or providing to a credit reporting agency 
information concerning whether a client has received or sought 
instruction concerning credit counseling or personal financial 
management from an agency, and not selling information about a client 
to any third party without the client's written permission, regardless 
of whether the counseling is presented in a classroom, on the 
telephone, on the Internet, or any other venue;
    (3) Upon request of the United States Trustee or EOUST, an agency 
shall submit a completed and signed tax waiver, which authorizes the 
United States Trustee or EOUST to seek confidential information 
regarding the agency from the Internal Revenue Service.
    (i) Agency financial requirements and surety bonds. (1) If an 
agency offers debt management plans, the agency must have adequate 
financial resources to provide continuing support services for 
budgeting plans over the life of any repayment plan, and provide for 
the safekeeping and payment of client funds, including an annual audit 
of the trust accounts in accordance with generally accepted auditing 
standards by an independent certified public accountant, and 
appropriate employee bonding; which includes:
    (i) Depositing all client funds into a trust account insured by a 
Federal institution with respect to each client. The records creating 
the trust account must demonstrate that the trust account was 
established in a fiduciary capacity and must comply with the Federal 
institution's regulations so that each client's funds are insured up to 
the maximum amount allowable by the Federal institution;
    (ii) Keeping and maintaining books, accounts, and records to 
provide a clear and readily understandable record of all business 
conducted by the agency; and
    (iii) Obtaining a surety bond payable to the United States in an 
amount which is the lesser of:
    (A) Two percent of the agency's prior year disbursements made from 
trust accounts; or
    (B) Equal to the average daily balance maintained in all trust 
accounts for the six months prior to submission of the application. At 
a minimum, the bond must be $5,000;
    (2) An agency may receive an offset or credit for the surety bond 
amount as follows:
    (i) The agency has obtained a surety bond, or similar cash, 
securities, insurance (other than employee fidelity insurance), or 
letter of credit, in compliance with the requirements of the state, 
commonwealth, district, or territory (``state'') in which the agency 
seeks approval from the United States Trustee;
    (ii) The surety bond, or similar cash, securities, insurance (other 
than employee fidelity insurance), or letter of credit provides 
protection for the clients of the agency;
    (iii) The surety bond, or similar cash, securities, insurance, or 
letter of credit, must be written in favor of the state or the 
appropriate state agency; and
    (iv) The offset or credit is based on the annual disbursements or 
average daily bank balance directly related to the clients in the 
particular state;
    (3) An agency must have adequate employee bonding or fidelity 
insurance. The amount of such bonding or fidelity shall be 50 percent 
of the surety bond amount calculated prior to any offset/credit that 
the agency may receive for state bonds. At a minimum, the employee bond 
or fidelity insurance must be $5,000;
    (4) An agency may receive an offset or credit in the employee bond/
fidelity insurance amount as follows:
    (i) The agency has obtained an employee bond or fidelity insurance 
in compliance with the requirements of a state, commonwealth, district, 
or territory in which the agency seeks approval from the United States 
Trustee;
    (ii) The deductible cannot exceed a reasonable amount considering 
the financial resources of the agency; and
    (iii) The offset/credit is based on the annual disbursements or 
average daily bank balance directly related to the clients in the 
particular state;
    (5) If the agency has contracted with another entity (``service 
provider'') to administer any part of its debt management plan, the 
service provider is approved by the United States Trustee as a 
nonprofit budget and credit counseling agency, or the service provider 
is specifically covered under the agency's surety bond or has a surety 
bond in a sufficient amount to provide for the safekeeping of the 
agency's client funds, and the service provider agrees in writing to 
allow the United States Trustee or EOUST to audit the trust accounts 
maintained by the service provider and to review the service provider's 
internal controls and administrative procedures.


Sec.  58.16  Procedures for inclusion on the approved list.

    (a) As used in this section the term ``agency'' means nonprofit 
budget and credit counseling agency.
    (b) Each nonprofit budget and credit counseling agency seeking to 
be included on the list of approved agencies must complete in its 
entirety the application form EOUST-CC1, ``Application for Approval as 
a Nonprofit Budget and Credit Counseling Agency'' (application), 
including all appendices, and submit it at the address indicated on the 
application.
    (c) The application must be executed under penalty of perjury in a 
manner specified in 28 U.S.C. 1746.
    (d) An application may not be accepted by the EOUST unless it is 
complete and has been signed by an agency representative who is 
authorized to sign on behalf of the agency. An application that is 
incomplete or has been altered, amended, or changed in any respect from 
the application at the United States Trustee Program's Web site may not 
be accepted by the EOUST. Such an application will be denied, and no 
further action will be taken on the request for inclusion on the 
approved list until a new application is submitted that corrects the 
defects.

[[Page 38081]]

    (e) The EOUST will not accept an application submitted by an agency 
on behalf of another individual or group of individuals. Each agency 
that desires to be included on the approved list must submit its own 
application.
    (f) Each agency must submit a new application 45 to 60 days before 
expiration of its six month probationary period or annual period to be 
considered for annual approval. After the application is completed and 
signed, the originals must be mailed to the EOUST, Credit Counseling 
Application Processing, at the address indicated on the application. 
The EOUST will not accept a photocopy or facsimile of the application.
    (g) An agency whose name appears on the list incorrectly may submit 
a written request that the name be corrected. An agency whose name 
appears on the list may submit a written request that its name be 
removed from the list.
    (h) By submitting an application, the agency expressly consents to 
the release and disclosure of the agency's name on the approved list 
and the publication of the agency's contact information.
    (i) Obligation to Update Information: (1) The agency has a 
continuing duty to promptly notify the EOUST of any circumstances that 
would materially alter or change a response to any section of the 
application, including but not limited to, changes in the location of 
primary or satellite business office(s); the principal contact person; 
name or fictitious name under which the agency does business; 
management, including the board of directors; a merger or consolidation 
with another entity; and the banks or financial institutions used by 
the agency;
    (2) The agency shall request approval by amendment to its 
application, and prior to occurrence of the following changes:
    (i) Cancellation or change in amount of the surety bond or employee 
fidelity bond or insurance;
    (ii) The engagement of a service provider to provide counseling 
services to administer debt management plans, or to otherwise control 
or account for client funds;
    (iii) An increase in the fees, contributions, or payments received 
from clients for counseling services or a change in the agency's policy 
for the reduction or waiver of fees;
    (iv) Expansion into additional judicial districts or withdrawal 
from judicial districts where the agency is approved; and
    (v) Method of delivery or type of counseling services;
    (3) The agency must include with any amendment to its application, 
a newly executed ``certification and signature;''
    (4) The agency will notify the EOUST immediately upon the 
occurrence of any of the below noted events:
    (i) Cancellation or termination of tax exempt status of the agency 
by the Internal Revenue Service;
    (ii) Cessation of business of the agency or of any office of the 
agency;
    (iii) Termination or cancellation of any surety bond or fidelity 
insurance;
    (iv) Any action brought against the agency by a Federal or state 
agency, including, but not limited to, the Federal Trade Commission, or 
any action against the surety bond or fidelity insurance;
    (v) Any action by a state agency to suspend the license or cancel 
other authorization to do business;
    (vi) A suspension by an accreditation organization or denial of 
accreditation;
    (vii) Withdrawal as an approved agency; and
    (viii) Change in the agency's nonprofit status;
    (j) An approved agency may not transfer or assign its United States 
Trustee approval under section 111 as a nonprofit budget and credit 
counseling agency to any party.


Sec.  58.17  Procedures for denying an application or removing an 
agency from the approved list, and the administrative review rights 
granted to denied or removed agencies.

    (a) As used in this section the term ``agency'' means nonprofit 
budget and credit counseling agency.
    (b) No administrative review will be granted to any applicant that 
submitted an incomplete application and had its application denied due 
to incompleteness and failed to subsequently submit a completed 
application.
    (c) The agency shall be notified in writing of any decision to deny 
the agency's application or to remove the agency from the approved list 
(``notice''). The notice shall state the reason(s) for the decision and 
shall reference any documents or communications with the agency, which 
were relied upon in making the denial or removal decision. If such 
documents or communications were not provided to the United States 
Trustee or the EOUST by the agency, copies of the documents or 
communications shall be provided with the notice. The notice shall be 
sent to the agency by overnight courier, for delivery the next business 
day.
    (d) The notice shall advise the agency that the decision is final 
unless the agency requests in writing a review (``request for review'') 
by the Director, Executive Office for United States Trustees 
(``Director''), no later than 20 calendar days from the date of 
issuance of the denial or removal notice. In order to be timely, a 
request for review must be received at the Office of the Director no 
later than 20 calendar days from the date of the denial or removal 
notice to the agency.
    (e) A decision to remove an agency from the approved list shall 
take effect upon the expiration of an agency's time to seek review from 
the Director or, if the agency timely seeks such review, upon the 
issuance of a final written decision by the Director.
    (f) Notwithstanding sub-paragraph (e) of this section, a decision 
to remove an agency from the approved list may include, or may later be 
supplemented by, an interim directive, which may immediately remove an 
agency from the approved list. Such an interim directive may be issued 
if one or more of the following are specifically found:
    (1) The agency is not providing for the safekeeping and payment of 
client funds;
    (2) The agency's surety bond has been canceled;
    (3) The agency made a material false statement on the application;
    (4) The agency (board of directors, officer, manager, employee, 
counselor, or agent) has engaged in conduct that is dishonest, 
deceitful, fraudulent, or criminal in nature;
    (5) The agency (board of directors, officer, manager, employee, 
counselor, or agent) has engaged in other gross misconduct that is 
unbefitting the agency's position as an approved agency;
    (6) The agency's nonprofit status has been revoked by the entity 
that issued the agency its nonprofit status;
    (7) Revocation of the agency's license to do business in a 
particular state, provided the immediate removal shall apply only to 
the federal judicial districts within the particular state; or
    (8) The Internal Revenue Service revokes the agency's tax exempt 
status.
    (g) The agency's request for review shall fully describe why the 
agency disagrees with the denial or removal decision, and shall be 
accompanied by all documents and materials that the agency wants the 
Director to consider in reviewing the decision. The agency shall send a 
copy of the request for review, and the accompanying documents and 
materials, to the Director by overnight courier, for delivery the next 
business day, and must be received by the Director within

[[Page 38082]]

20 calendar days of the denial or removal notice.
    (h) The Director may seek additional information from any party, in 
the manner and to the extent the Director deems appropriate.
    (i) The Director shall issue a written decision no later than 45 
calendar days from the receipt of the agency's request for review, 
unless the agency agrees to a longer period of time or the Director 
extends the period. That decision shall determine whether the denial or 
removal decision is supported by the record and the action is an 
appropriate exercise of discretion, and shall adopt, modify, or reject 
the denial or removal decision. The Director's decision shall 
constitute final government agency action.
    (j) In reaching a determination, the Director may specify a person 
to act as a reviewing official. The reviewing official shall not be a 
person who was involved in the denial or removal decision. The 
reviewing official's duties shall be specified by the Director on a 
case by case basis, and may include reviewing the record, obtaining 
additional information from the participants, providing the Director 
with written recommendations, or such other duties as the Director 
shall prescribe in a particular case.
    (k) An agency that files a request for review shall bear its own 
costs and expenses, including counsel fees.


Sec. Sec.  58.18 through 58.24  [Reserved]

0
3. Add and reserve Sec. Sec.  58.18 through 58.24.

0
4. Add Sec. Sec.  58.25, 58.26, and 58.27 to read as follows:


Sec.  58.25  Qualifications for approval as providers of a personal 
financial management instructional course:

    (a) Definition of provider. As used in this section the term 
``provider'' means a provider of a personal financial management 
instructional course.
    (b) Qualifications. To be included on the list of approved 
providers under 11 U.S.C. 111, a provider shall meet the qualifications 
set forth in paragraphs (d) through (k) of this section. A provider 
shall continuously meet these qualifications in order to remain 
included on this list when the list is updated thereafter.
    (c) Preemption. Nothing contained in these regulations or the 
related application, appendices or instructions is intended to preempt 
any applicable law or regulation governing the conduct or operations of 
a provider.
    (d) Structure and organization. A provider of a personal financial 
management instructional course must be in compliance with all 
applicable laws and regulations of the United States and each state, 
commonwealth, district, or territory of the United States in which the 
provider conducts courses. Nothing contained in these instructions, the 
application, or the appendices thereto, is intended to preempt any 
applicable law or regulation governing the conduct or operations of the 
provider.
    (e) Standards for teachers. A provider shall employ trained 
personnel with adequate experience and training in providing effective 
instruction and services, which means the provider shall employ, at a 
minimum, an individual who holds at least one of the following current 
certifications and/or accreditations, or who has equivalent training or 
experience, to supervise instructors:
    (1) A state teacher's certificate in any subject;
    (2) Certification as a Certified Financial Planner (CFP);
    (3) Certification or accreditation as a credit counselor or a 
financial counselor by a recognized independent organization;
    (4) Certification by the American Association of Family and 
Consumer Sciences;
    (5) Registered as a Registered Financial Consultant (RFC); or
    (6) Certified as a Certified Public Accountant (CPA).
    (f) Learning materials and methodologies. A provider shall provide 
learning materials and teaching methodologies designed to assist 
debtors in understanding personal financial management and that are 
consistent with stated objectives directly related to the goals of such 
instructional course, which include written information and instruction 
on all of the following topics:
    (1) Budget development, which consists of the following:
    (i) Setting short-term and long-term financial goals, as well as 
developing skills to assist in achieving these goals;
    (ii) Calculating gross monthly income and net monthly income;
    (iii) Identifying and classifying monthly expenses as fixed, 
variable, or periodic;
    (2) Money management, which consists of the following:
    (i) Keeping adequate financial records;
    (ii) Developing decision-making skills required to distinguish 
between wants and needs, and to comparison shop for goods and services;
    (iii) Maintaining appropriate levels of insurance coverage, taking 
into account the types and costs of insurance;
    (iv) Saving for emergencies, for periodic payments, and for 
financial goals;
    (3) Wise use of credit, which consists of the following:
    (i) The types, sources, and costs of credit and loans;
    (ii) Identifying debt warning signs;
    (iii) Appropriate use of credit and alternatives to credit use;
    (iv) Checking a credit rating;
    (4) Consumer information, which consists of the following:
    (i) Public and non-profit resources for consumer assistance;
    (ii) Applicable consumer protection laws and regulations, such as 
those governing correction of a credit record and protection against 
consumer fraud.
    (g) Course procedures. A provider shall ensure the following 
procedures are followed:
    (1) Generally, the provider shall:
    (i) Require each debtor student to provide proof of identification, 
to provide his/her bankruptcy case number, and to sign in and sign out 
of the course;
    (ii) Conduct the course for a minimum of two hours in length. 
Courses offered via the Internet or telephone should be designed for 
completion with a minimum of two hours;
    (iii) At the end of the course, collect from each debtor student a 
completed course evaluation. The evaluation shall be in a form 
acceptable to the EOUST;
    (2) For classroom instruction, the provider shall ensure:
    (i) A teacher is present for purposes of instruction and 
interaction with debtor students;
    (ii) Class size is reasonably limited to ensure an effective 
presentation of the course materials;
    (3) For telephone instruction, the provider shall:
    (i) Provide a toll-free telephone number;
    (ii) Comply with the Americans with Disabilities Act and also 
include a toll-free number for deaf or hearing-impaired debtor 
students, e.g. TTY, TDD, or Text Telephone;
    (iii) Employ adequate procedures to ensure that the debtor student 
is the individual who completed the course;
    (iv) Ensure that a teacher is present telephonically for purposes 
of instruction and interaction with debtor students;
    (v) Provide copies of the learning materials to debtor students 
before the telephone instruction session;
    (4) For Internet instruction, the provider shall:
    (i) Comply with the Americans with Disabilities Act and its 
application to the Internet;

[[Page 38083]]

    (ii) Employ adequate procedures to ensure that the debtor student 
is the individual who completed the course and that the individual 
received two hours of instruction;
    (iii) Ensure that a teacher will respond within one business day to 
a debtor student's questions or comments;
    (5) In addition to meeting all other requirements, the provider who 
conducts telephone or Internet courses must demonstrate sufficient 
experience and proficiency in designing and providing services over the 
telephone or Internet.
    (h) Facilities. A provider shall provide adequate facilities 
situated in a reasonably convenient location at which such 
instructional course is offered, except that such facilities may 
include the provisions of such instructional course by telephone or 
through the Internet, if such instructional course is effective;
    (1) The provider shall ensure that any facility used by debtor 
students complies with all applicable laws and regulations including, 
but not limited to, the Americans with Disabilities Act Accessibility 
Guidelines, and all federal, state, and local fire, health, safety, and 
occupancy laws, codes, rules, or regulations.
    (i) Activity report and records. A provider shall prepare and 
retain reasonable records (which shall include the debtor's bankruptcy 
case number) to permit evaluation of the effectiveness of such 
instructional course, including any evaluation of satisfaction of 
instructional course requirements for each debtor attending such 
instructional course, which shall be available for inspection and 
evaluation by the EOUST or the United States Trustee for the district 
in which such instructional course is offered;
    (1) Upon application for annual approval, the provider must furnish 
an estimate of the information requested in Appendix F to the 
application, projected to the end of either the probationary period or 
annual period. Within 30 days after the completion of either the 
probationary period or annual period, the provider must furnish an 
amended Appendix F which includes the actual information;
    (2) Make all records related to the provider's compliance with 11 
U.S.C. 111 available to the United States Trustee or EOUST upon request 
and cooperate with the United States Trustee or EOUST for any scheduled 
or unscheduled on-site visit or customer service audit.
    (j) Fees and certificates. If a fee is charged for counseling 
services, a provider shall charge a reasonable fee, and provide 
services without regard to ability to pay the fee; the provider's 
criteria for providing services without a fee or at a reduced rate must 
be provided to the United States Trustee. In addition, a provider 
shall:
    (1) Have sufficient computer capabilities to issue certificates of 
completion of an instructional course in conformance with the 
directives established by the EOUST;
    (2) Advise the debtor student of the fee schedule before the 
instructional course is provided and inform the debtor student that 
services are available for free or at a reduced rate based on the 
debtor student's ability to pay;
    (3) Issue certificates to any debtor student who completes an 
instructional course without regard to the debtor student's ability to 
pay;
    (4) Issue the certificate within three business days to a debtor 
student after completion of the required instructional course;
    (5) Not withhold the issuance of a certificate because of a debtor 
student's failure to obtain a passing grade on a quiz, examination, or 
test. Although a test may be incorporated into the curriculum to 
evaluate the effectiveness of the course and to ensure that the course 
has been completed, the provider cannot deny a certificate to a debtor 
student if the debtor student has completed the course as designed;
    (6) Not charge a separate fee for the issuance of a certificate 
unless the provider has clearly disclosed such fee before the beginning 
of the instructional course;
    (7) Issue a certificate to each spouse in a joint case whether the 
course is completed independently or jointly;
    (8) Maintain adequate records to issue replacement certificates and 
to verify the authenticity of certificates filed by bankruptcy debtors.
    (k) Provider declarations and acknowledgments. (1) The provider's 
owner, president, chairman, trustee, or other authorized official is 
required to declare, by signing the application, that such individual 
is authorized to complete the application on behalf of the provider; 
that such individual has read and knows the contents of the application 
and all enclosures and attachments submitted; and to affirm under 
penalty of perjury that all of the representations and statements 
contained therein are true and correct to the best of such individual's 
knowledge, information, and belief;
    (2) The provider shall disclose the following information to each 
debtor student before the commencement of the instructional course:
    (i) The provider's fee schedule, including any cost to the debtor 
student in addition to the course fee;
    (ii) A statement that the course is offered to debtor students 
without regard to a debtor student's ability to pay;
    (iii) The qualifications, including educational and training 
background, of the provider's teachers;
    (iv) A schedule of course dates, times, and locations;
    (v) A statement that the provider does not pay or receive fees or 
other consideration for the referral of debtor students to or by the 
provider;
    (vi) A statement that, upon completion of the course, the provider 
will provide a certificate of course completion to the debtor student;
    (3) By executing and submitting the ``Application for Approval as a 
Provider of a Personal Financial Management Instructional Course,'' the 
provider acknowledges and agrees to abide by the prohibitions, 
limitations, and obligations set forth in Appendix A, 
``Acknowledgments, Agreements, and Declarations in Support of 
Application for Approval as a Provider of a Personal Financial 
Management Instructional Course,'' which include, but are not limited 
to, the following:
    (i) Ensuring that no member of the board of directors or trustees, 
owner, officer, manager, employee, or agent is a United States Trustee 
Program employee, panel trustee, or person with a financial or familial 
connection to a panel trustee or an employee of the United States 
Trustee Program. For purposes of this paragraph, a person is not deemed 
to have a financial relationship to a panel trustee solely because the 
person is an employee of the panel trustee;
    (ii) Not paying or receiving referral fees or other consideration 
for the referral of debtor students;
    (iii) Ensuring that the course will not contain any commercial 
advertising, and that the provider shall not promote, market, or sell 
financial products; solicit business of any type; or sell information 
about the debtor to any third party without the debtor's permission, 
whether the course is presented in a classroom, on the telephone, or on 
the Internet;
    (iv) Complying with the EOUST's directions on approved advertising, 
which is located in Appendix A to the application;
    (v) Cooperating with the EOUST and the United States Trustee in 
timely responding to any questions or inquiries concerning the 
provider's operations and/or instructional course;

[[Page 38084]]

    (vi) Consenting that any forms, agreements, contracts, or other 
materials furnished to a debtor student will not limit the debtor 
student's ability to bring an action or claim under the provision of 
the United States Bankruptcy Code. 11 U.S.C. 101 et. seq.
    (l) Universities. Accredited universities and community colleges 
(``universities'') are eligible to apply to become providers using a 
streamlined version of the application. Universities need to complete 
only the following portions of the application:
    (1) In section 1--General Information Concerning the Provider--
complete sections: 1.1, 1.2, 1.3, 1.4, 1.5, 1.6, 1.8, and 1.10;
    (2) In section 4--Learning Materials and Methodologies--complete 
sections: 4.1, 4.2, 4.4, 4.5, 4.6, 4.7, and 4.8;
    (3) In section 6--Fees and Issuance of Certificates--complete 
section 6.1;
    (4) In section 7--Activity Report for Approved Providers--complete 
section 7.1;
    (5) In section 8--Acknowledgments, Agreements, and Declarations--
complete sections 8.1 and 8.2;
    (6) In section 9--Certification and Signature--execute the 
application as indicated in the instructions;
    (7) Completed applications should be submitted to the EOUST in 
accordance with the procedures in section 58.19.


Sec.  58.26  Procedures for inclusion on the approved provider list.

    (a) As used in this section the term ``provider'' means a provider 
of a personal financial management instructional course.
    (b) Each provider seeking to be included on the list of approved 
providers must complete in its entirety the application form EOUST-DE1, 
``Application for Approval as a Provider of a Personal Financial 
Management Course'' (application), including all appendices, and submit 
it at the address indicated on the application. Accredited universities 
may complete only the portions of the application as indicated in 
section 58.25(l).
    (c) The application must be executed under penalty of perjury in a 
manner specified in 28 U.S.C. 1746.
    (d) An application will not be accepted by the EOUST unless it is 
complete and has been signed by a provider representative who is 
authorized to sign on behalf of the provider. An application that is 
incomplete or has been altered, amended, or changed in any respect from 
the application at the United States Trustee Program's Web site will 
not be accepted by the EOUST. Such an application will be denied, and 
no further action on the request for inclusion on the approved list 
will be taken until a new application is submitted that corrects the 
defects.
    (e) The EOUST will not accept an application submitted by a 
provider on behalf of another individual or group of individuals. Each 
provider that desires to be included on the approved list must submit 
its own application.
    (f) Each provider must submit a new application 45 to 60 days 
before expiration of its six month probationary period or annual period 
to be considered for annual approval. After the application is 
completed and signed, the originals and a copy must be mailed to the 
EOUST, Debtor Education Provider Application Processing, at the address 
indicated on the application. The EOUST will not accept a photocopy or 
facsimile of the application in lieu of the original.
    (g) A provider whose name appears on the list incorrectly may 
submit a written request that the name be corrected. A provider whose 
name appears on the list may submit a written request that its name be 
removed from the list.
    (h) By submitting an application, the provider expressly consents 
to the release and disclosure of the provider's name on the approved 
list, and the publication of the provider's contact information.
    (i) Obligation to Update Information: (1) The provider has a 
continuing duty to promptly notify the EOUST of any circumstances that 
would materially alter or change a response to any section of the 
application, including but not limited to, changes in the location of 
primary or satellite business office(s); the principal contact person; 
name or fictitious name under which the provider does business; 
management, including the board of directors; and a merger or 
consolidation with another entity;
    (2) The provider shall request approval by amendment to its 
application, and prior to occurrence of the following changes:
    (i) An increase in the fees, contributions, or payments received 
from debtor students for the instructional course or a change in the 
provider's policy for the reduction or waiver of fees;
    (ii) Expansion into additional judicial districts or withdrawal 
from judicial districts where the provider is approved; and
    (iii) Method of delivery type of instructional services or course 
curriculum;
    (3) The provider must include with any amendment to its 
application, a newly executed ``certification and signature;''
    (4) The provider will notify the EOUST immediately upon the 
occurrence of any of the below noted events:
    (i) Cessation of business of the provider or of any office of the 
provider;
    (ii) Any action by a state agency to suspend the license or cancel 
other authorization to do business;
    (iii) A suspension by an accreditation organization or denial of 
accreditation; and
    (iv) Withdrawal as an approved provider;
    (j) An approved provider may not transfer or assign its United 
States Trustee approval under section 111 as a provider of a personal 
financial management instructional course.


Sec.  58.27  Procedures for denying an application or removing a 
provider from the approved list, and the administrative review rights 
granted to denied or removed providers.

    (a) As used in this section the term ``provider'' means a provider 
of a personal financial management instructional course.
    (b) No administrative review will be granted to any applicant that 
submitted an incomplete application and had its application denied due 
to incompleteness and failed to subsequently submit a completed 
application.
    (c) The provider shall be notified in writing of any decision 
denying the provider's application or to remove the provider from the 
approved list (``notice''). The notice shall state the reason(s) for 
the decision and shall reference any documents or communications with 
the provider, which were relied upon in making the denial or removal 
decision. If such documents or communications were not provided to the 
United States Trustee or the EOUST by the provider, copies of the 
documents or communications shall be provided with the notice. The 
notice shall be sent to the provider by overnight courier, for delivery 
the next business day.
    (d) The notice shall advise the provider that the decision is final 
unless the provider requests in writing a review (``request for 
review'') by the Director, Executive Office for United States Trustees 
(``Director''), no later than 20 calendar days from the date of 
issuance of the denial or removal notice. In order to be timely, a 
request for review must be received at the Office of the Director no 
later than 20 calendar days from the date of the removal notice to the 
provider.

[[Page 38085]]

    (e) A decision to remove a provider from the approved list shall 
take effect upon the expiration of a provider's time to seek review 
from the Director or, if the provider timely seeks such review, upon 
the issuance of a final written decision by the Director.
    (f) Notwithstanding sub-paragraph (e) of this section, a decision 
to remove a provider from the approved list may include, or may later 
be supplemented by, an interim directive, which may immediately remove 
a provider from the approved list. Such an interim directive may be 
issued if one or more of the following are specifically found:
    (1) The provider made a material false statement on the 
application;
    (2) The provider (board of directors, officer, manager, employee, 
counselor, or agent) has engaged in conduct that is dishonest, 
deceitful, fraudulent, or criminal in nature;
    (3) The provider (board of directors, officer, manager, employee, 
counselor, or agent) has engaged in other gross misconduct that is 
unbefitting the provider's position as an approved provider;
    (4) Revocation of the provider's license to do business in a 
particular state, provided the immediate removal shall apply only to 
the federal judicial districts within the particular state.
    (g) The provider's request for review shall fully describe why the 
provider disagrees with the denial or removal decision, and shall be 
accompanied by all documents and materials that the provider wants the 
Director to consider in reviewing the decision. The provider shall send 
a copy of the request for review, and the accompanying documents and 
materials, to the Director by overnight courier, for delivery the next 
business day, and must be received by the Director within 20 calendar 
days of the denial or removal notice.
    (h) The Director may seek additional information from any party, in 
the manner and to the extent the Director deems appropriate.
    (i) The Director shall issue a written decision no later than 45 
calendar days from the receipt of the provider's request for review, 
unless the provider agrees to a longer period of time or the Director 
extends the period. That decision shall determine whether the denial or 
removal decision is supported by the record and the action is an 
appropriate exercise of discretion, and shall adopt, modify, or reject 
the denial or removal decision. The Director's decision shall 
constitute final government agency action.
    (j) In reaching a determination, the Director may specify a person 
to act as a reviewing official. The reviewing official shall not be a 
person who was involved in the denial or removal decision. The 
reviewing official's duties shall be specified by the Director on a 
case by case basis, and may include reviewing the record, obtaining 
additional information from the participants, providing the Director 
with written recommendations, or such other duties as the Director 
shall prescribe in a particular case.
    (k) A provider that files a request for review shall bear its own 
costs and expenses, including counsel fees.

    Dated: June 22, 2006.
Clifford J. White III,
Acting Director, Executive Office for United States Trustees.
 [FR Doc. E6-10234 Filed 7-3-06; 8:45 am]
BILLING CODE 4410-40-P