Federal Register / Vol. 78, No. 50 / Thursday, March 14, 2013 / Rules and Regulations 16159 

the denial or removal decision, and 

shall be accompanied by all documents 

and materials the agency wants the 

Director to consider in reviewing the 

denial or removal decision. The agency 

shall send the original and one copy of 

the request for review, including all 

accompanying documents and 

materials, to the Office of the Director 

by overnight courier, for delivery the 

next business day. To be timely, a 

request for review shall be received at 

the Office of the Director no later than 

21 calendar days from the date of the 

notice to the agency. 

(k) The United States Trustee shall 

have 21 calendar days from the date of 

the agency’s request for review to 

submit to the Director a written 

response regarding the matters raised in 

the agency’s request for review. The 

United States Trustee shall provide a 

copy of this response to the agency by 

overnight courier, for delivery the next 

business day. 

(l) The Director may seek additional 

information from any party in the 

manner and to the extent the Director 

deems appropriate. 

(m) In reviewing the decision to deny 

an agency’s application or remove an 

agency from the approved list, the 

Director shall determine: 

(1) Whether the denial or removal 

decision is supported by the record; and 

(2) Whether the denial or removal 

decision constitutes an appropriate 

exercise of discretion. 

(n) Except as provided in paragraph 

(o) of this section, the Director shall 

issue a final decision no later than 60 

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 deadline. 

The Director’s final decision on the 

agency’s request for review shall 

constitute final agency action. 

(o) Whenever the United States 

Trustee provides under paragraph (i) of 

this section that a decision to remove an 

agency from the approved list is 

effective immediately, the Director shall 

issue a written decision no later than 15 

calendar days from the receipt of the 

agency’s request for review, unless the 

agency agrees to a longer period of time. 

The decision shall: 

(1) Be limited to deciding whether the 

determination that the removal decision 

should take effect immediately was 

supported by the record and an 

appropriate exercise of discretion; 

(2) Constitute final agency action only 

on the issue of whether the removal 

decision should take effect immediately; 

and 

(3) Not constitute final agency action 

on the ultimate issue of whether the 

agency should be removed from the 

approved list; after issuing the decision, 

the Director shall issue a final decision 

by the deadline set forth in paragraph 

(n) of this section. 

(p) In reaching a decision under 

paragraphs (n) and (o) of this section, 

the Director may specify a person to act 

as a reviewing official. 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, and 

such other duties as the Director shall 

prescribe in a particular case. 

(q) An agency that files a request for 

review shall bear its own costs and 

expenses, including counsel fees. 

(r) When a decision to remove an 

agency from the approved list takes 

effect, the agency shall: 

(1) Immediately cease providing 

counseling services to clients and shall 

not provide counseling services to 

potential clients; 

(2) No later than three business days 

after the date of removal, send all 

certificates to all clients who completed 

counseling services prior to the agency’s 

removal from the approved list; 

(3) No later than three business days 

after the date of removal, return all fees 

to clients and potential clients who had 

paid for counseling services, but had not 

completely received them; and 

(4) Transfer any debt repayment plans 

that the agency is administering to 

another approved agency. 

(s) An agency must exhaust all 

administrative remedies before seeking 

redress in any court of competent 

jurisdiction. 

Dated: February 14, 2013. 

Clifford J. White III, 

Director, Executive Office for United States 

Trustees. 

[FR Doc. 2013–04361 Filed 3–13–13; 8:45 am] 

BILLING CODE 4410–40–P 

DEPARTMENT OF JUSTICE 

28 CFR Part 58 

[Docket No EOUST 104] 

RIN 1105–AB31 

Application Procedures and Criteria for 

Approval of Providers of a Personal 

Financial Management Instructional 

Course by United States Trustees 

AGENCY: Executive Office for United 

States Trustees (‘‘EOUST’’), Justice. 

ACTION: Final rule. 

SUMMARY: This final rule (‘‘rule’’) sets 

forth procedures and criteria United 

States Trustees shall use when 

determining whether applicants seeking 

to become and remain approved 

providers of a personal financial 

management instructional course 

(‘‘providers’’) satisfy all prerequisites of 

the United States Code, as implemented 

under this rule. Under the current law, 

individual debtors must participate in 

an instructional course concerning 

personal financial management 

(‘‘instructional course’’ or ‘‘debtor 

education’’) before receiving a discharge 

of debts. The current law enumerates 

mandatory prerequisites and minimum 

standards applicants seeking to become 

approved providers must meet. Under 

this rule, United States Trustees will 

approve applicants for inclusion on 

publicly available provider lists in one 

or more federal judicial districts if an 

applicant establishes it meets all the 

requirements of the United States Code, 

as implemented under this rule. After 

obtaining such approval, a provider 

shall be authorized to provide an 

instructional course in a federal judicial 

district during the time the provider 

remains approved. 

EOUST intends to add to its 

regulations governing debtor education 

providers, two new provisions not 

previously included in the proposed 

rule. The first provision will amend 

section 58.30(c)(5) to require providers 

to notify the United States Trustee of 

certain actions pursuant to 11 U.S.C. 

111(g)(2) or other consumer protection 

statutes, such as an entry of judgment or 

mediation award, or the provider’s entry 

into a settlement order, consent decree, 

or assurance of voluntary compliance. 

The second provision will amend 

section 58.33(i) to require a provider to 

assist an individual with limited 

English proficiency by expeditiously 

directing the individual to a provider 

that can provide instruction in the 

language of the individual’s choice. 

Because these provisions were not 

discussed in the proposed rule 

published on November 14, 2008, 

EOUST will publish another Notice of 

Proposed Rulemaking requesting public 

comment with respect to these two 

provisions. 

DATES: Effective Date: This rule is 

effective April 15, 2013. 

ADDRESSES: EOUST, 441 G Street, NW., 

Suite 6150, Washington, DC, 20530. 

FOR FURTHER INFORMATION CONTACT: 

Doreen Solomon, Assistant Director for 

Oversight on (202) 307–2829 (not a tollfree number), Wendy Tien, Deputy 

Assistant Director for Oversight on (202) 

307–3698 (not a toll-free number), or 

Larry Wahlquist, Office of the General 


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16160 Federal Register / Vol. 78, No. 50 / Thursday, March 14, 2013 / Rules and Regulations 

Counsel on (202) 307–1399 (not a tollfree number). 

SUPPLEMENTARY INFORMATION: On July 5, 

2006, EOUST published an interim final 

rule entitled 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 

(‘‘Interim Final Rule’’). 71 FR 38,076 

(July 5, 2006). Due to the necessity of 

quickly establishing a regulation to 

govern the debtor education application 

process, EOUST promulgated the 

Interim Final Rule rather than a notice 

of proposed rulemaking (‘‘proposed 

rule’’). On November 14, 2008, at 73 FR 

67,435, EOUST published a proposed 

rule on this topic in an effort to 

maximize public input, rather than 

publishing a final rule after publication 

of the Interim Final Rule. Before the 

comment period closed on January 13, 

2009, EOUST received eleven 

comments. The comments received and 

EOUST’s responses are discussed 

below. This rule finalizes the proposed 

rule with changes that, in some cases, 

reduce the burden on providers while 

maintaining adequate protection for 

debtors. 

This rule implements the debtor 

education sections of the Bankruptcy 

Abuse Prevention and Consumer 

Protection Act of 2005 (‘‘BAPCPA’’), 

Public Law 109–8, 119 Stat. 23, 37, 38 

(April 20, 2005), which are codified at 

11 U.S.C. 111. Effective October 17, 

2005, individual debtors under chapters 

7, 13, and in some instances chapter 11, 

must receive from an approved provider 

debtor education before they may 

receive a discharge of their debts. 11 

U.S.C. 111, 727(a)(11), 1141(d)(3), 

1328(g)(1). 

Section 111(b) of title 11, United 

States Code, governs the approval by 

United States Trustees of debtor 

education providers for inclusion under 

11 U.S.C. 111(a)(1) on publicly available 

provider lists in one or more United 

States district courts. Section 111 of title 

11 provides that, in applicable 

jurisdictions, a United States Trustee 

may approve an application to become 

an approved provider only after the 

United States Trustee has thoroughly 

reviewed the applicant’s (a) 

qualifications, and (b) instructional 

course. 11 U.S.C. 111(b)(1). A United 

States Trustee has statutory authority to 

require an applicant to provide 

information with respect to such review. 

11 U.S.C. 111(b)(1). EOUST reserves the 

right to publish on its public Web site 

non-confidential business information 

relating to debtor education providers, 

including contact information, services 

provided, language support services 

offered, and fees charged for services. 

After completing that thorough 

review, a United States Trustee may 

approve a debtor education provider 

only if the provider establishes that it 

fully satisfies all requisite standards. 11 

U.S.C. 111(b). Among other things, an 

applicant must establish it will (a) 

provide trained personnel with 

adequate experience in providing 

effective instruction and services, (b) 

provide learning materials and teaching 

methodologies designed to assist 

debtors in understanding personal 

financial management, (c) if applicable, 

provide adequate facilities for providing 

an instructional course, (d) prepare and 

retain reasonable records to permit 

evaluation of the effectiveness of an 

instructional course, and (e) if a fee is 

charged, charge a reasonable fee, and 

provide services without regard to 

ability to pay the fee. 11 U.S.C. 

111(d)(1). 

This rule will implement those 

statutory requirements. By 

accomplishing that, the rule will help 

debtors obtain effective instruction from 

competent providers. It also will 

provide an appropriate mechanism by 

which applicants can apply for approval 

under section 111 of title 11 to become 

approved providers, and will enable 

such applicants to attempt to meet their 

burden of establishing they should be 

approved by United States Trustees 

under 11 U.S.C. 111. 

Summary of Changes in Final Rule 

The final rule modifies the proposed 

rule by making it: (1) Less burdensome 

on providers; and (2) by providing 

technical or clarifying modifications. 

The modifications are summarized 

according to their classification below. 

A parenthetical reference to the 

regulatory text has been added to assist 

the reader in locating the relevant 

provisions of the rule. In addition, 

where applicable, a reference to the 

comment number, where a more 

detailed explanation of these changes is 

discussed, is included: 

Modifications To Make the Final Rule 

Less Burdensome on Providers 

• The definition of ‘‘material change’’ 

has been revised to eliminate staff other 

than the provider’s management or 

instructors (§ 58.25(b)(22)—comment # 

B6). 

• A provider may disclose to debtors 

that, to the extent the provider is 

approved as a nonprofit budget and 

credit counseling agency pursuant to 11 

U.S.C. 111(c), the United States Trustee 

has reviewed those credit counseling 

services (§ 58.33(k)(8)—comment # 

B23). 

• The reference to ‘‘any applicable 

law’’ in the prohibition that a provider 

take no action to limit debtors from 

bringing claims against the provider as 

provided in 11 U.S.C. 111(g)(2) has been 

deleted (§ 58.33(n)(5)—comment # B25). 

• The rule has been revised to add a 

rebuttable presumption that a debtor 

lacks the ability to pay the instructional 

fee if the debtor’s current household 

income is less than 150 percent of the 

poverty guidelines updated periodically 

in the Federal Register by the U.S. 

Department of Health and Human 

Services under the authority of 42 

U.S.C. 9902(2), as adjusted from time to 

time, for a household or family of the 

size involved in the fee determination 

(§ 58.34(b)(1)—comment # B28). 

• The United States Trustee is 

required to review the basis for the 

mandatory fee waiver policy one year 

after the effective date of the rule, and 

then periodically, but not less 

frequently than every four years 

(§ 58.34(b)(2)—comment # B28). 

• The requirement that, for a provider 

to send an instructional certificate to a 

debtor’s attorney, the debtor must make 

the request in writing to the provider 

has been deleted (§ 58.35(a)—comment 

# B30). 

• The requirement that providers 

provide original signatures on 

certificates, in recognition of electronic 

filing in the bankruptcy courts and the 

technology used to generate certificates, 

has been deleted (§ 58.35(j)(2)— 

comment # B34). 

• The prohibition that providers not 

file certificates with the court has been 

deleted to enable providers to file 

certificates with the court should the 

Federal Rules of Bankruptcy Procedure 

be amended to authorize providers to 

file certificates with the court or to 

otherwise notify the bankruptcy court of 

course completion (§ 58.35(i) of the 

proposed rule). 

Technical or Clarifying Modifications 

• The definition of ‘‘debtor’’ has been 

revised to apply only to such debtors 

that have sought an instructional course 

from an approved provider 

(§ 58.25(b)(8)—comment # B2). 

• The definition of ‘‘limited English 

proficiency’’ has been revised to be 

consistent with that used by the Civil 

Rights Division of the Department of 

Justice (§ 58.25(b)(21)—comment # B5). 

• The definition of ‘‘material change’’ 

has been amended to include a change 

in language services provided by the 

provider. Providers are already required 

to inform the United States Trustee of 

the languages they provide when 


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applying for approval. This clarification 

emphasizes the importance of notifying 

the United States Trustee whenever a 

provider adds or removes a language 

from its available services 

(§ 58.25(b)(22)). 

• The rule has been amended to 

clarify that providers may not use direct 

mail or electronic mail solicitations to 

contact debtors, unless the solicitations 

include a prominent disclaimer stating, 

‘‘This is an advertisement for services,’’ 

and to refrain from using seals or logos 

that may be confused easily with those 

used by any federal government agency 

(§ 58.33(c)(4)—comment # B14). 

• The rule has been amended to 

clarify that a provider must disclose its 

policy, if any, concerning fees 

associated with generating an 

instructional certificate prior to 

rendering any instructional services 

(§ 58.33(k)(1)—comment # B32). 

• The rule has been amended to 

clarify that approved providers who 

publish information on the Internet 

concerning their fees must include their 

policies enabling debtors to obtain an 

instructional course for free or at 

reduced rates based upon the debtor’s 

lack of ability to pay. This is not an 

additional burden on providers as the 

proposed rule requires providers to 

disclose their fee polices prior to 

providing services; the final rule makes 

it clear that this requirement includes 

Internet based instruction 

(§ 58.33(k)(2)). 

• The rule has been amended to 

clarify that a provider’s duty to disclose 

its fee policy before providing services 

includes disclosing the provider’s 

policy to provide free bilingual 

instruction to any limited English 

proficient debtor. This is not an 

additional burden on providers as the 

proposed rule requires providers to 

disclose their fee polices prior to 

providing services; the final rule makes 

it clear that this requirement includes 

disclosing providers’ fee policies 

regarding services for limited English 

proficient individuals (§ 58.33(k)(3)). 

• The rule has been amended to 

clarify that a provider’s duty to maintain 

records regarding limited English 

proficiency debtors includes 

maintaining records regarding the 

methods of delivery of an instructional 

course, the types of languages and 

methods of delivery requested by 

debtors, the number of debtors served, 

and the number of referrals made to 

other providers. Because the proposed 

rule already requires providers to 

maintain records regarding the delivery 

of services to limited English 

proficiency individuals, this is not an 

additional burden in the final rule. 

Rather, the final rule makes clearer what 

is expected of providers in terms of 

record-keeping for limited English 

proficient individuals (§ 58.33(m)(3)). 

• The rule has been amended to 

clarify that certificates must bear not 

only the date, but also the time and the 

time zone when the instructional course 

was completed by the debtor. This 

technical modification does not impose 

an additional burden as the proposed 

rule requires certificates to contain the 

date of completion and including the 

time and time zone is a minor 

modification to the date on the 

certificate (§ 58.35(l)(3)). 

• The rule has been amended to 

correct non-substantive stylistic, 

numbering and typographical errors. 

Discussion of Public Comments 

EOUST received eleven comments on 

the proposed rule. Many of the 

comments contained several subcomments. EOUST appreciates the 

comments and has considered each 

comment carefully. EOUST’s responses 

to the comments are discussed below, 

either in the ‘‘General Comments’’ 

section or in the ‘‘Section-by-Section 

Analysis.’’ 

A. General Comments 

1. Cost of the Rule to Providers 

Comment: EOUST received several 

comments that the rule will make it 

more expensive for providers to operate 

and that they will pass the costs on to 

debtors. 

Response: EOUST recognizes that the 

rule may cause providers to incur 

additional costs, but those costs are 

minimal. Additionally, the extra costs 

for such measures as procedures to 

verify a debtor’s identity, and 

mandatory disclosure of the provider’s 

fee policy, are sufficiently important to 

protect consumers to warrant the extra 

costs to the provider. 

B. Comments on Specific Subsections of 

the Proposed Rule 

1. Use of the Terms Accreditation and 

Certification [§ 58.25(b)(1) and (2)] 

Comment: EOUST received one 

comment that the rule erroneously uses 

the terms accreditation and certification 

interchangeably, when accreditation 

refers to organizations and certification 

refers to individuals. One other 

comment recommended an amendment 

to section 58.25(b)(2)(i) to accommodate 

providers who certify other, unrelated, 

providers. 

Response: EOUST has reviewed the 

rule carefully and found no instances in 

which accreditation was used to refer to 

individuals and certification was used 

to refer to organizations. In a few 

instances, a provider representative 

must sign a certification attesting to a 

particular fact or facts; these instances, 

however, do not use the term 

erroneously. 

No change to the rule is necessary to 

permit providers to certify unrelated 

providers. Such a business practice is 

not permitted under the final rule. 

2. Definition of Debtor [§§ 58.25(b)(8) 

and 58.33(n)(10)] 

Comment: EOUST received one 

comment recommending limiting the 

restriction on sale of information about 

debtors to those debtors who have 

received instruction from a provider, 

not all persons who have contacted a 

provider (§ 58.33(n)(10)). 

Response: Providers cannot provide 

services to debtors who never seek an 

instructional course. Thus, the 

definition of ‘‘debtor’’ has been revised 

to apply only to such debtors that have 

sought an instructional course from an 

approved provider. The restriction on 

selling information about debtors, 

however, applies with equal force to 

debtors who seek, but ultimately do not 

receive, instructional services from a 

particular provider. 

3. Definition of Effective Instruction 

[§ 58.25(b)(10)] 

Comment: EOUST received one 

comment seeking the incorporation of a 

separate standard that does not 

incorporate the criteria set forth in 11 

U.S.C. 111(d)(2). 

Response: EOUST has reviewed the 

statutory criteria, as incorporated in the 

definition, and has determined that the 

statutory criteria effectively set forth the 

standard for evaluating the quality of 

instruction. 

4. Definition of Legal Advice 

[§§ 58.25(b)(20) and 58.33(b)] 

Comment: One comment expressed 

concern about the rule’s reference to 11 

U.S.C. 110(e)(2) when defining legal 

advice. Because 11 U.S.C. 110(e)(2) 

includes bankruptcy procedures and 

rights, and because debtors may ask 

instructors bankruptcy-related questions 

during an instructional course, the 

comment expressed concern that the 

very act of instruction could cause 

instructors and providers to give ‘‘legal 

advice’’ in violation of the rule’s 

prohibition. 

Response: Because of the differences 

among the states concerning the 

definition of the unauthorized practice 

of law, and the resulting difficulty in 

defining ‘‘legal advice,’’ EOUST 

concluded the most appropriate 

approach is to adopt the definition 


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Congress provided in 11 U.S.C. 

110(e)(2). EOUST is sensitive to the 

concern that an instructor’s explanation 

of bankruptcy principles to debtors may 

be considered ‘‘legal advice,’’ but 

interprets 11 U.S.C. 110(e)(2) to mean 

that instructors shall not advise debtors 

concerning the application of 

bankruptcy laws, principles, or 

procedures to a particular individual’s 

circumstances, and may not describe 

how bankruptcy laws, principles, or 

procedures would affect a particular 

individual’s case. Rather, the instructor 

may explain basic bankruptcy 

principles and how such procedures are 

applied generally. 

5. Definition of Limited English 

Proficiency [§ 58.25(b)(21)] 

Comment: EOUST received four 

comments seeking revision of this 

definition to clarify its meaning. 

Response: EOUST concurs that a 

technical modification is necessary and 

has revised the definition of the term to 

match that used by the Civil Rights 

Division of the Department of Justice, as 

set forth in Notice, Guidance to Federal 

Financial Assistance Recipients 

Regarding Title VI, Prohibition Against 

National Origin Discrimination 

Affecting Limited English Proficient 

Persons, 67 FR. 41,455 (June 18, 2002). 

Though the wording is slightly different, 

the meaning of limited English 

proficiency is essentially the same, i.e. 

individuals who do not speak English as 

their primary language or who have 

difficulty understanding English. 

6. Definition of Material Change 

[§ 58.25(b)(22)] 

Comment: Three comments stated 

that staff changes should be deleted 

from the definition of material change 

since the requirement is unnecessarily 

burdensome; one also sought to 

eliminate management from the 

definition of material change. 

Response: EOUST agrees that this 

requirement may be overly burdensome, 

as it concerns staffing changes. Not 

every change in staff requires EOUST 

notification. The purpose of this 

requirement is to ensure that EOUST 

remains aware of changes in key 

personnel. Because the definition of 

‘‘material change’’ already specifies 

notification for changes in management, 

the rule has been modified to change 

‘‘staffing’’ to ‘‘instructors’’ and thereby 

reduce the burden on providers. 

7. Definition of Referral Fees 

[§ 58.25(b)(26)] 

Comment: One comment stated that 

the definition of referral fees contains a 

loophole that would allow an entity to 

charge a referral fee merely by calling it 

something else. 

Response: EOUST has deleted the 

definition of ‘‘locator,’’ eliminating any 

concerns that a loophole exists in the 

definition of referral fees. The revised 

definition of ‘‘referral fees’’ prohibits the 

transfer or passage of any money or 

other consideration between a provider 

and another entity as consideration or in 

exchange for the referral of clients for 

instructional services. 

8. Definition of Relative [§ 58.25(b)(27)] 

Comment: EOUST received one 

comment requesting that the definition 

of ‘‘relative’’ be limited to the second 

degree of consanguinity. 

Response: No change is necessary. 

The requirement does not impose a 

material burden on providers 

necessitating a change to the rule. 

9. Mandatory Duty To Notify—Material 

Change [§ 58.30(a)] 

Comment: One comment objected to 

the need to inform EOUST promptly of 

material changes, proposing that 

monthly notification is sufficient. 

Response: No change is necessary. 

Because the material changes requiring 

notice to EOUST are specific and 

involve matters of public interest and 

consumer protection, such as cessation 

of the provider’s business, revocation of 

a provider’s articles of incorporation, or 

suspension of accreditation, EOUST 

requires immediate notice. 

10. Mandatory Duty To Notify— 

Consumer Litigation [§ 58.30(c)] 

Comment: One comment observed 

that, although 11 U.S.C. 111(g)(2) 

confers a private right of action against 

nonprofit budget and credit counseling 

agencies who violate section 111, the 

proposed rule does not require 

providers to notify EOUST of such 

actions. The comment suggested an 

additional mandatory disclosure to 

EOUST requiring affirmative 

notification of actions pursuant to 11 

U.S.C. 111(g)(2) or other consumer 

protection statutes. 

Response: The proposed change 

would enhance consumer protection by 

providing EOUST with information 

concerning private litigation based on 

consumer protection statutes and 

government enforcement actions. 

EOUST will publish a notice of 

proposed rulemaking to solicit public 

comments regarding whether EOUST 

should require notification of such 

actions. 

11. Mandatory Duty To Notify— 

Inaccurate Information [§ 58.30(e)] 

Comment: One comment objected to 

the requirement that a provider notify 

EOUST of inaccuracies on the list of 

approved providers. The comment 

suggested that, because EOUST 

possesses the information that 

comprises the approved list, placing the 

burden of notification on the provider is 

inappropriate. 

Response: A provider is in the best 

position to recognize whether the 

information about the provider posted 

on the list of approved providers is 

accurate. Accordingly, the duty to notify 

EOUST of any inaccuracies necessarily 

rests with the provider. Although 

EOUST corrects inaccuracies of which it 

becomes aware internally or from other 

outside sources, to the extent the 

provider is aware of inaccurate 

information, the provider must notify 

EOUST. No change to the rule is 

necessary. 

12. Duty To Obtain Prior Consent 

[§ 58.31(a)] 

Comment: One comment objected to 

the requirement that a provider seek 

approval of any listed changes other 

than the engagement of an independent 

contractor. The comment recommended 

simple notice for other listed changes. 

Response: Because the list of 

approved providers constitutes 

EOUST’s principal means of conveying 

information to the public, and because 

debtors and debtors’ counsel rely on the 

list of approved providers to locate 

providers in their judicial districts who 

provide instruction by the various 

methods, providers must notify EOUST 

of any proposed changes to judicial 

districts or methods of delivery. 

Furthermore, because United States 

Trustees require notice and the 

opportunity to comment on a provider’s 

fitness to provide instruction in a 

judicial district, simple notice is 

inadequate. Finally, as discussed below 

concerning sections 58.34(a) and 

58.34(b), because fees in excess of $50 

per debtor are not presumed to be 

reasonable, and because 11 U.S.C. 

111(d)(1)(E) requires providers who 

charge a fee to provide services without 

regard to the debtor’s ability to pay the 

fee, EOUST must approve changes to a 

provider’s fee and fee waiver policy in 

advance. Accordingly, no change to this 

rule is necessary. 

13. Criteria To Become Approved 

Providers [§§ 58.32 and 58.33(f)] 

Comment: EOUST received one 

comment recommending that 

instructional curricula should include 


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bankruptcy-specific content to address 

the specific hurdles debtors face upon 

emerging from bankruptcy. 

Response: The detailed substantive 

curriculum requirements in section 

58.33(f) mandate debtor education 

spanning a broad range of financial 

matters, including budgeting, financial 

management, credit, consumer 

information, and coping with financial 

crisis. The elements of the curriculum 

address the areas of greatest concern to 

consumers without posing undue risk 

that providers and their instructors will 

provide legal advice concerning 

bankruptcy or financial regulation to 

debtors. As noted elsewhere, EOUST 

interprets 11 U.S.C. 110(e)(2) to permit 

instructors to explain basic bankruptcy 

principles and procedures and their 

general application; such matters may 

form part of the required debtor 

education curriculum. 

14. Restrictions on Advertising 

[§ 58.33(c)(4)] 

Comment: One comment advocated 

including two additional ethical rules 

concerning direct mail and telephone 

advertising. The first would bar 

providers from contacting debtors via 

outbound telephone calls, unless the 

provider already has provided 

instructional services to the debtor in 

question, and the call is in response to 

a request for contact by the debtor or 

debtor’s counsel, either directly or 

through a contact form or locator 

service. The second would bar providers 

from using direct mail or electronic mail 

solicitations to contact debtors, unless 

the solicitations include a prominent 

disclaimer stating, ‘‘This is an 

advertisement for services,’’ refrain from 

using seals or logos that may be 

confused easily with those used by any 

federal government agency, do not 

include certain words (such as ‘‘trustee’’ 

or ‘‘bankruptcy court’’), and the 

solicitation is in response to a request 

for contact by the debtor or debtor’s 

counsel, either directly or through a 

contact form or locator service. 

Response: EOUST acknowledges that 

some restrictions on advertising and 

solicitation are necessary to protect 

consumers. However, the first proposed 

restriction, which prohibits providers 

from contacting debtors unless the 

debtor initiates the contact after the 

instructional course, forecloses a 

substantial body of contact between 

debtors and providers. Such a limitation 

may be more restrictive of commercial 

speech than is necessary to advance the 

government’s interest in consumer 

protection. 

EOUST concurs with the second 

proposed restriction. Some types of mail 

solicitations from providers to recentlyfiled debtors may be confused with 

bankruptcy court correspondence, as 

they bear barcodes, case numbers, and 

other misleading markings, and, on at 

least one occasion, bear the words 

‘‘Bankruptcy Court’’ on the envelope. 

Accordingly, the requirements that mail 

solicitations bear a prominent 

disclaimer and include only logos, seals, 

or similar marks that are substantially 

dissimilar to those used by federal 

agencies and courts constitute 

reasonable restrictions on advertising. 

These restrictions minimize consumer 

deception arising from the false 

impression that the solicitation 

constitutes an official court or United 

States Trustee Program communication. 

These restrictions are narrowly tailored 

to advance the government’s interest in 

consumer protection and are consistent 

with First Amendment principles 

governing commercial speech. See, e.g., 

Central Hudson Gas & Elec. Corp. v. 

Public Serv. Comm’n, 447 U.S. 557 

(1980) (holding that restrictions on 

commercial speech must directly 

advance an important interest and shall 

be no more restrictive of speech than 

necessary and recognizing the 

constitutionality of regulations 

restricting deceptive advertising). 

Furthermore, the restrictions on 

advertising are not an additional burden 

on providers as the proposed rule 

requires providers to ‘‘comply with the 

United States Trustee’s directions on 

approved advertising, including without 

limitation those set forth in appendix A 

to the application’’ (§ 58.33(n)(7) of the 

proposed rule). In that appendix, it 

states that approved providers shall not 

use the Department of Justice’s seal, the 

United States Trustee’s seal, the 

Bankruptcy Court’s seal, or any seal of 

the United States or a likeness thereof. 

Providers have been aware of this 

prohibition since the inception of the 

debtor education application in 2005. 

The final rule clarifies the contours of 

this restriction on advertising. 

15. Instructor Qualifications 

[§ 58.33(d)(1)] 

Comment: One comment objected to 

the requirement that instructors, rather 

than the provider, hold specific 

qualifications. The comment suggested 

that the listed requirements should 

apply to the provider as an entity, rather 

than to individual instructors. Another 

comment recommended imposing an 

additional requirement that instructors 

receive credit counseling-specific 

training before initial certification and 

be required to receive annual continuing 

education. 

Response: The instructor qualification 

requirements are meant to ensure that 

each instructor possesses sufficient 

expertise in financial matters to provide 

substantive instruction to consumers. 

Accordingly, inexperienced instructors 

either must complete a financial course 

of study or must work a minimum of six 

months in a related area to ensure they 

are qualified to serve as instructors. 

Based upon experience administering 

the Interim Final Rule and its 

interactions with providers, EOUST 

concluded the requirements set forth in 

this rule are sufficient to ensure that 

instructors will be qualified to provide 

the statutorily mandated instruction to 

debtors. Accordingly, no change to the 

rule is necessary. 

16. Verification of Identity [§ 58.33(d)(3) 

and (e)(2)] 

Comment: EOUST received comments 

concerning identity verification. One 

expressed the opinion that verification 

of debtor identity in the context of 

Internet and telephone instruction is 

impossible, and another sought further 

guidance concerning the appropriate 

means of identity verification. 

Response: Establishing an 

individual’s identity in the context of 

telephone and Internet instruction may 

pose difficulties. This does not, 

however, obviate identity verification 

requirements. Indeed, many providers 

already have implemented effective 

identity verification procedures. For inperson instruction, an individual may 

present his or her driver’s license, or 

similar photo identification, to establish 

his or her identity. Because the 

instructor is physically present and can 

confirm that the photo in the driver’s 

license matches the debtor, this 

identification procedure is sufficient for 

in-person instruction. In the case of 

Internet and telephone instruction the 

individual is not in the instructor’s 

physical presence and additional 

measures are necessary to confirm the 

individual’s identity. In such cases, 

providers successfully have requested 

that debtors supply their mothers’ 

maiden names, or other information 

known specifically to the individual 

debtors, to confirm identity. 

17. Learning Materials and 

Methodologies [§ 58.33(f) and (g)] 

Comment: One comment 

recommended that the rule incorporate 

the National Standards for Adult 

Financial Literacy Education, 

established by the commenter, as the 

substantive standard for personal 

financial instruction. The commenter 

also recommended a clarification that 


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‘‘learning materials’’ should be ‘‘written 

learning materials.’’ 

Response: No change to the rule is 

necessary. EOUST declines to adopt 

standards established by one source as 

the substantive standard for instruction 

by all providers. 

18. Course Procedures—Length of Time 

[§ 58.33(g)(1)(i)] 

Comment: EOUST received one 

comment that requiring ‘‘a minimum’’ 

of two hours for an instructional course 

emphasizes the time actually spent in 

class rather than the topics covered and 

the knowledge transferred to the debtor. 

The commenter suggested replacing the 

word ‘‘minimum’’ with 

‘‘approximately.’’ 

Response: No change is necessary. 

Based upon experience administering 

the Interim Final Rule and its 

interactions with providers, EOUST has 

determined that two hours, at a 

minimum, are necessary to cover all the 

substantive topics set forth in 11 U.S.C. 

§ 111(d)(1) and 28 CFR § 58.33(f). 

19. Course Procedures—When Course Is 

‘‘Complete’’ [§ 58.33(g)] 

Comment: One comment sought 

clarification about when Internet 

instruction is ‘‘complete’’ and suggested 

that completion should be defined 

specifically. The comment noted that, in 

the case of Internet instruction, 

providers and debtors are uncertain 

whether instruction is considered 

complete when the debtor finishes the 

online course, or whether further 

interaction with an instructor is 

necessary. 

Response: Unlike budget and credit 

counseling, which, by statute, require 

client-specific counseling with respect 

to credit and financial problems and 

development of a plan to address each 

individual client’s financial problems, 

post-bankruptcy personal financial 

management instruction does not 

require individualized counseling and 

the development of a personalized plan. 

Accordingly, the instruction is 

‘‘complete’’ (1) when the debtor has 

finished an instructional course that 

complies with the provisions of 11 

U.S.C. 111(d) and the other provisions 

of this rule, and that EOUST has 

approved; (2) after the debtor has 

established his or her identity as 

described in this rule; and (3) after the 

debtor has taken any test required by the 

provider, and if the debtor failed to 

obtain at least a 70 percent passing 

grade, received follow-up instruction 

from the provider; the scope of the 

follow-up instruction is left to the 

discretion of the provider. 

20. Course Procedures—Telephonically 

Present [§ 58.33(g)(3)(i)] 

Comment: One comment sought 

clarification regarding the meaning of 

the term ‘‘present’’ for telephone-based 

courses. 

Response: The requirement that an 

instructor is telephonically present to 

instruct and interact with debtors does 

not require the instructor to provide live 

course instruction on the telephone, but 

requires that the instructor be present to 

respond to debtor inquiries. 

21. Course Procedures—Internet 

Providers [§ 58.33(g)(4)(i)] 

Comment: One comment objected to 

the application of § 58.33(g)(3)(v) to 

Internet course providers, noting that it 

does not obtain telephone numbers from 

its Internet clients. 

Response: To the extent instruction 

takes place by Internet, the provider 

may satisfy this requirement by 

providing direct communication from 

an instructor by electronic mail, live 

chat, or telephone. 

22. Special Needs [§ 58.33(j)] 

Comment: One comment stated that 

‘‘special needs’’ should be a defined 

term. 

Response: The term ‘‘special needs’’ is 

in the public vernacular and commonly 

refers to people with disabilities. No 

further clarification is necessary. 

23. Mandatory Disclosures [§ 58.33(k)] 

Comment: EOUST received several 

comments concerning the number of 

mandatory disclosures. One comment 

stated that the number of mandatory 

disclosures is excessive and should be 

reduced to avoid confusing debtors; the 

comment suggested deleting paragraphs 

58.33(k)(4) and (5) as unnecessary, and 

allowing paragraphs (6) and (9) to be 

given during the instructional session 

rather than before, at the instructor’s 

discretion. 

EOUST also received a comment 

recommending that, to the extent a 

provider also is approved as a nonprofit 

budget and credit counseling agency 

pursuant to 11 U.S.C. 111(c), the 

provider be able to state that the United 

States Trustee has reviewed those 

services. 

Response: While EOUST recognizes 

that the disclosures are numerous, they 

are necessary to protect consumers. 

Paragraphs (4) and (5) provide debtors 

with essential information concerning 

the qualifications of the course 

instructor and inform debtors who 

otherwise may be unaware that 

providers may not charge or receive 

referral fees. These disclosures allow 

debtors to make informed decisions 

concerning the choice of provider by 

giving debtors complete information 

before they engage the provider. 

Paragraphs (6) and (9) inform consumers 

that the provider must provide a 

certificate promptly and the certificate 

will be provided only if the consumer 

completes the instruction. These 

disclosures are particularly important to 

eliminate misunderstandings between 

the provider and debtor and make clear 

to debtors that they must complete 

instruction before receiving a certificate. 

Though the proposed rule did not 

prohibit providers from informing 

debtors that they were, if applicable, 

also approved credit counseling 

agencies, the rule did not expressly 

allow it either. To reduce a restriction 

on providers, paragraph (k)(8) has been 

revised to permit a provider to disclose 

that, to the extent that provider is also 

approved as a nonprofit budget and 

credit counseling agency pursuant to 11 

U.S.C. 111(c), the United States Trustee 

has reviewed those credit counseling 

services. 

24. Recordkeeping Requirements 

[§ 58.33(m)] 

Comment: EOUST received several 

comments concerning recordkeeping 

requirements. A number of comments 

objected that the recordkeeping 

requirement was burdensome. One 

objected to the requirement in section 

58.33(m)(3) that Internet instructional 

course providers assess the language 

debtors use in daily life. Another 

comment objected to the requirement 

that providers maintain records 

concerning the provision of free or 

reduced-fee services on a voluntary 

basis. 

Response: Certain recordkeeping 

requirements, such as the requirement 

to maintain records concerning the 

numbers of debtors who seek 

instruction in languages other than 

English, are necessary to advance the 

underlying purpose of the statute and to 

assist EOUST in ensuring that 

instructional services are available to 

the broadest range of consumers. 

Accordingly, the final rule retains most 

recordkeeping requirements regarding 

all debtors but has limited this 

requirement concerning prohibiting 

bundling or tying agreements as to 

debtors who seek but ultimately do not 

receive instructional services from a 

particular provider. In those instances, 

the broad reference to ‘‘debtors’’ does 

not advance a legitimate regulatory 

objective. Accordingly, the definition of 

‘‘debtors’’ has been revised to conform 

to 11 U.S.C. 101(13), to the extent that 

the individual has sought an 


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instructional course from an approved 

provider. 

The requirement that providers retain 

hard copies of signed certificates for two 

years has been deleted. The final rule no 

longer requires providers to provide 

original signatures on certificates in 

recognition of electronic filing in the 

bankruptcy courts and the technology 

used to generate certificates. Copies of 

such certificates shall be retained for 

180 days from the date of issuance. 

25. Additional Minimum Requirements 

[§ 58.33(n)(5)] 

Comment: Two comments regarding 

provider obligations objected to the 

rule’s requirement that providers take 

no action to limit debtors from bringing 

claims against providers ‘‘under any 

applicable law, including but not 

limited to 11 U.S.C. § 111(g)(2).’’ The 

comment expressed the opinion that the 

phrase ‘‘any applicable law’’ exceeds 

the scope of 11 U.S.C. § 111(g)(2). 

Response: To reduce the burden on 

providers, the rule has been amended to 

strike the reference to ‘‘any applicable 

law.’’ 

26. Advertising [§ 58.33(n)(7) and (n)(9)] 

Comment: EOUST received one 

comment suggesting that the phrase 

‘‘approval does not endorse or assure 

the quality of a Provider’s services’’ 

should be deleted. The comment 

claimed advertising is protected speech 

and that the quoted phrase raises doubts 

in the mind of the consumer concerning 

the meaning of approval. The comment 

also objected to the restrictions on 

commercial advertising during the 

instructional course on First 

Amendment grounds. 

Response: This disclaimer is 

necessary to inform consumers that, 

although the provider is approved to 

issue instructional course certificates, 

such approval does not constitute a 

government guarantee or endorsement 

of the quality of the provider’s services. 

This disclaimer protects consumers who 

otherwise might infer that approval 

means all provider actions 

automatically carry the approval or 

endorsement of the federal government. 

In addition, after obtaining approval, a 

provider may change its business 

practices or employ unqualified 

instructors, and EOUST may not learn 

of these changes in quality immediately. 

Finally, advertising constitutes 

commercial speech and is subject to 

regulations that directly advance a 

substantial governmental interest, 

provided there exists a reasonable fit 

between the regulations and the 

governmental interest. As EOUST has a 

substantial interest in ensuring that the 

public is not misled regarding the 

meaning of provider approval, and as 

the disclaimer is narrowly tailored to 

advance EOUST’s interest without 

otherwise controlling or otherwise 

limiting the content of a provider’s 

advertisements, the disclaimer is 

reasonable. 

For the same reasons, the limitation 

on commercial advertising during the 

instructional course constitutes a 

reasonable time, place, and manner 

restriction on speech. 

27. Fees [§ 58.34(a)] 

Comment: EOUST received numerous 

comments regarding the determination 

of reasonable fees. Comments spanned 

suggestions for the dollar amount of a 

reasonable fee, ranging from $60 to 

$100, to suggestions that the proposed 

$50 reasonable fee is unreasonable and 

should be adjusted for regional 

variations. A number of comments 

stated that the establishment of a fixed 

reasonable fee runs afoul of the market 

economy, and that competition will 

keep fees low while taking regional 

variations and cost changes into 

account. One comment expressed the 

concern that the proposed reasonable 

fee and fee waiver requirements would 

render it unable to cover the costs of 

providing instruction. 

Response: EOUST has considered 

carefully the comments concerning both 

the amount of a reasonable fee and the 

policies underlying the establishment of 

a fixed fee, both in the context of the 

policies underlying the statute and the 

experiences of approved providers since 

passage of the Interim Final Rule, and 

has determined: (a) Fees in excess of 

$50 per person are not presumptively 

reasonable; (b) EOUST shall review the 

amount of the presumptively reasonable 

fee one year after the effective date of 

the rule, and then periodically, but not 

less frequently than every four years; (c) 

providers may request permission to 

charge a larger fee, which EOUST will 

consider on a case-by-case basis; and (d) 

whether a provider charges fees for an 

instructional session per individual or 

per couple is within the business 

discretion of the provider. 

EOUST acknowledges that local 

variations in income, cost of living, 

overhead, inflation, and other factors 

may influence and lead to inter-provider 

differences in determining the 

reasonableness of instructional course 

fees. However, based on EOUST’s 

experience with approved providers, the 

$50 presumptively reasonable fee 

adequately incorporates the costs 

associated with complying with the 

statute and rule, taking into account the 

increasing prevalence of telephone and 

Internet instruction, both of which have 

lower costs than in-person instruction, 

and the prevalence of group instruction 

in the post-bankruptcy course setting. 

The rule permits providers to exceed the 

presumptively reasonable fee after 

receiving approval from EOUST by 

demonstrating, at a minimum, that its 

costs for delivering the instructional 

services justify the requested fee. The 

provider bears the burden of 

establishing that its proposed fee is 

reasonable. Such requests may occur at 

the time of the provider’s annual reapplication for approval to provide 

instructional services, or at any other 

time the provider deems necessary. 

Providers that have previously 

submitted requests to charge more than 

$50, and have been granted permission 

to do so, will not be required to 

resubmit such requests if the provider 

continues to charge that fee in the same 

amount. Of course, any new requests 

must be submitted to EOUST for 

approval. 

28. Fee Waivers [§ 58.34(b)] 

Comment: EOUST received numerous 

comments concerning the requirement 

that providers offer instructional 

services at a reduced cost, or waive the 

fee entirely, for debtors who are 

financially unable to pay. The proposed 

rule requires providers to waive or 

reduce fees for debtors whose income is 

less than 150 percent of the poverty 

guidelines updated periodically in the 

Federal Register by the U.S. Department 

of Health and Human Services under 

the authority of 42 U.S.C. 9902(2), as 

adjusted from time to time, for a 

household or family of the size involved 

in the fee determination (the ‘‘poverty 

level’’). 

While one comment expressed 

concern that the association between the 

poverty level and the determination of 

a debtor’s ability to pay necessitated 

further study and assessment of 

financial impact on the providers, one 

comment objected to the use of 150 

percent of the poverty level as a 

mandatory fee waiver requirement and 

suggested that 100 percent of the 

poverty level was appropriate. Another 

comment suggested permitting or 

implementing a schedule of discounts 

for debtors whose incomes fall below 

the poverty level, but who can afford to 

pay some amount, while yet another 

comment suggested not only that a 

debtor should bear the burden of 

demonstrating inability to pay, but that 

a debtor should affirmatively request the 

fee waiver. 

Response: Based on these comments 

and EOUST’s existing fee waiver data, 

EOUST has revised the rule to reduce 


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the burden on providers while still 

maintaining adequate protection for 

debtors. EOUST acknowledges that 

standardization may not take into 

account local differences, and may have 

a disparate impact on providers located 

in geographic areas of concentrated low 

income. Although a provider may apply 

to EOUST to increase its instructional 

fee, such fee increases ultimately shift 

the fee burden to those debtors more 

able to pay. 

Furthermore, a mandatory fee waiver 

for debtors with income at below 150 

percent of the poverty level likely 

would result in a substantial increase in 

the number of fee waivers granted. 

Although some commentators urged 

EOUST to adopt rigid criteria requiring 

providers to offer services without 

charge, such an inflexible rule would be 

inconsistent with similar court practices 

concerning waiver of court filing fees for 

in forma pauperis debtors that do not 

require the wholesale waiver of filing 

fees for all debtors with incomes below 

a certain income level. Under BAPCPA, 

debtors earning less than 150 percent of 

the poverty level are eligible to apply for 

a waiver of the court filing fee and the 

court determines whether an eligible 

debtor has the ability to pay the filing 

fee. Not all debtors who are eligible for 

a waiver of the filing fee apply, and not 

all debtors who apply are eligible. 

Fewer than two percent of debtors 

ultimately obtain a waiver of court filing 

fees. In comparison, based on available 

data from 2005, approximately 30 

percent of chapter 7 debtors are eligible 

to apply for a waiver of the court filing 

fee. If EOUST were to require providers 

to adopt a mandatory fee waiver policy 

with respect to all such debtors, some 

providers could suffer severe financial 

losses that would render them unable to 

provide services, reducing capacity to 

serve the overall debtor population. As 

of July 2009, according to self-reporting 

by approved debtor education 

providers, without the proposed 

mandatory fee waiver, 12.2 percent of 

certificates were issued at no cost, with 

another 13.9 percent issued at reduced 

cost. 

In response to these concerns, EOUST 

has adopted a rebuttable presumption of 

a mandatory fee waiver or fee reduction 

policy for debtors whose income is less 

than the poverty level, based on the in 

forma pauperis standard set forth in 28 

U.S.C. § 1930(f)(1). Under this rebuttable 

presumption policy, instead of waiving 

the fee entirely, a provider may charge 

a debtor a reduced fee if the provider 

determines that the debtor does, in fact, 

have the ability to pay some of the fee; 

the amount may be determined using a 

sliding scale, of the provider’s design, 

that takes into account the debtor’s 

financial circumstances. If the provider 

determines that the debtor has the 

ability to pay some of the fee, there is 

no minimum amount by which the 

provider should reduce the fee; the 

amount of fee reduction is entirely 

dependent upon the debtor’s ability to 

pay as determined by the debtor’s 

financial circumstances. This rebuttable 

presumption satisfies the statutory 

mandate that instructional services be 

provided without regard to a debtor’s 

ability to pay the fee while taking into 

account the provider’s need to generate 

sufficient income from fees to cover 

operational costs. Accordingly, this 

policy establishes a uniform, objective 

standard by which providers, debtors, 

and EOUST can evaluate debtor 

entitlement to a fee waiver or a fee 

reduction depending on each particular 

debtor’s ability to pay. The provider 

makes the determination of whether to 

grant the fee waiver or fee reduction 

when the provider provides instruction 

to the debtor; the provider need not 

consult with EOUST before making its 

determination. EOUST will review a 

provider’s fee waiver policies and 

statistics during the provider’s annual 

review or during a quality of service 

review. Finally, because the poverty 

level is updated periodically and takes 

into account the debtor’s household 

size, this policy accounts for nationwide 

changes in the cost of living over time. 

Establishing a presumptively 

mandatory but rebuttable fee waiver or 

fee reduction policy for debtors whose 

household income falls below 150 

percent of the poverty level recognizes 

providers’ need to generate sufficient 

income from fees to cover operational 

costs in light of the statutory mandate. 

To the extent a provider believes the fee 

waiver policy set forth in the rule 

adversely impacts its financial viability, 

the provider may apply to EOUST to 

increase its fee. The provider shall 

demonstrate that its costs of delivering 

instructional services (including 

opportunity costs associated with 

waived or foregone fees) justify the 

proposed fee. The rates of both full and 

partial fee waivers based on debtor 

income levels, and the mechanisms by 

which providers implement the 

rebuttable presumption, are subject to 

EOUST scrutiny during the annual 

application review for each approved 

provider and during quality of service 

reviews to assess compliance with 11 

U.S.C. 111 and this final rule. 

To permit EOUST to periodically 

evaluate the cost and business impact of 

this mandatory fee waiver policy on 

debtors and providers, and determine 

whether providers are applying the 

mandatory fee waiver policy uniformly 

and fairly, the rule has been amended to 

add a new section, § 58.34(b)(2), 

requiring the United States Trustee to 

review the basis for the mandatory fee 

waiver policy one year after the effective 

date of the rule, and then periodically, 

but not less frequently than every four 

years. When reviewing the basis for the 

mandatory fee waiver or fee reduction 

policy, EOUST may consider the impact 

on both providers and debtors by 

evaluating data from providers 

concerning the instructional fees, 

increases to such fees, and rates of total 

and partial fee waiver. By retaining the 

mandatory, objective fee waiver policy 

but requiring its periodic review, 

EOUST advances the statutory mandate 

that instructional services be provided 

without regard to the debtor’s ability to 

pay, while enabling EOUST to revisit 

the objective standard in light of 

provider operational costs and impact 

on debtors. The reasonableness of 

provider determinations will continue 

to be subject to EOUST oversight during 

the application process, during on-site 

reviews, and in the course of resolving 

specific complaints. 

29. Certificates—Bundling [§ 58.34(d)] 

Comment: One comment 

recommended revising this provision to 

permit providers who also offer credit 

counseling to offer a discount to credit 

counseling clients who return to the 

provider for post-bankruptcy 

instruction. The comment 

recommended new language to read, ‘‘A 

provider shall not combine a debtor’s 

purchase of an instructional course with 

the purchase of any other service offered 

by the provider.’’ 

Response: EOUST does not prohibit 

the practice of discounting postbankruptcy instructional course fees for 

credit counseling clients who return to 

take the instructional course as long as 

the provider does not require the client 

to purchase both courses. The rule’s 

prohibition against linking services does 

not prohibit credit counseling agencies 

from offering a discount to debtors who 

wish to return for post-bankruptcy 

instruction. No change to the rule is 

necessary. 

30. Delivery of Certificates—to Whom 

[§ 58.35(a)] 

Comment: EOUST received several 

comments concerning delivery of 

certificates to a debtor’s attorney. The 

proposed rule required a debtor to 

authorize, in writing, the delivery of the 

instructional certificate to the debtor’s 

attorney. The comments expressed the 

opinion that requiring a debtor to 

provide written consent to a provider is 


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inefficient, particularly when the debtor 

receives instruction by telephone or 

Internet. In such instances, the 

comments stated, mail transmission of 

written consent to a provider delays the 

delivery of the certificate. Rather than 

requiring written consent, the rule 

should permit the debtor to authorize 

verbally the provider to send the 

certificate to the debtor’s attorney. 

Response: EOUST agrees that written 

consent to deliver a certificate to a 

debtor’s attorney is unnecessary and 

unduly impedes the efficiency of 

telephone and Internet instruction. 

Accordingly, the rule has been revised 

to permit verbal authorization to send a 

certificate to a debtor’s attorney. In the 

case of Internet instruction, electronic 

mail authorization or an electronic 

affirmation (such as a radio button or a 

box on a Web page) is sufficient. 

31. Delivery of Certificates—Time 

[§ 58.35(b)] 

Comment: Several comments objected 

to the requirement that a provider 

deliver the certificate to a debtor within 

three business days of completion of the 

instructional course. One comment 

suggested that the rule specify that 

‘‘delivery’’ means transmission, not 

receipt. 

Response: The requirement that a 

provider send the certificate to a debtor 

within three business days accords the 

provider adequate time and is 

commercially reasonable. The term 

‘‘deliver’’ has been changed to ‘‘send’’ to 

encompass a wide range of transmission 

methods. To the extent a provider is 

unable to send the certificate within the 

specified time because of extenuating 

circumstances, such as problems with 

generating or printing the certificate, 

illness of the instructor, or other 

circumstances beyond the provider’s 

control, EOUST can evaluate such 

incidents on a case-by-case basis. 

32. Certificates—Fees [§§ 58.33(k)(1) 

and 58.35] 

Comment: Several comments objected 

to permitting providers to charge 

separate fees for certificates; other 

comments sought clarification 

concerning the type of consent 

providers must obtain before charging 

additional fees for certificates. One 

comment sought clarification in the case 

of telephone and Internet instruction, 

and suggested that clients be able to 

consent verbally or electronically in 

such cases. 

Response: EOUST concludes that the 

rule should not have specific 

instructions for circumstances that arise 

infrequently as most providers do not 

charge a separate fee for the issuance of 

the certificate. Accordingly, the rule has 

been amended to strike the specific and 

additional instructions for providers 

that charge separate fees for certificates. 

Instead, the final rule requires the 

general disclosures to include 

disclosure of all fees, including any 

additional fees for certificates. This is 

not an additional burden on providers 

as the proposed rule, and Interim Final 

Rule, already require providers to 

disclose their fee policy before 

rendering services. 

33. Certificates—Issuance [§ 58.35(h)] 

Comment: One comment objected to 

the proposed rule on the grounds that 

certificate issuance is a purely 

administrative function, and entities 

operating under the authority of an 

approved provider, in addition to 

providers, should be permitted to issue 

certificates. 

Response: The certificate avers that 

the instructor has provided the 

represented instruction to the debtor. 

Accordingly, the requirement that only 

approved providers generate certificates, 

and not subsidiary or related but 

unapproved entities, serves quality 

control and consumer protection 

functions. Accordingly, no change to the 

rule is necessary. 

34. Certificates—Original Signature 

[§ 58.35(j)(2)] 

Comment: Several comments objected 

to the requirement that certificates 

generated for electronic filing must be 

generated in paper form as well and 

must bear the original signature of the 

instructor. The comments criticized the 

requirement as expensive and timeconsuming, and noted that the rule 

contains precautions against creation of 

forged or fraudulent certificates. 

Response: EOUST agrees and has 

reduced the burden on providers by 

deleting the requirement that, when a 

certificate is generated for electronic 

filing with the court, the provider must 

provide the debtor a paper certificate 

bearing the instructor’s original 

signature as well. 

35. Certificates—Information [§ 58.35(l)] 

Comment: Two comments sought 

revisions concerning information on the 

certificate. One comment recommended 

a revision to the rule specifically 

authorizing providers to verify the 

judicial district in which the debtor’s 

bankruptcy case is pending via PACER 

or other court records, to minimize 

debtor error. Another comment objected 

to the requirement that the certificate 

bear the instructor’s name. 

Response: No change to the rule is 

necessary. Nothing in the rule or 11 

U.S.C. 111(d) prohibits instructors or 

providers from accessing public records, 

to the extent authorized, to verify the 

judicial district in which the debtor’s 

bankruptcy case is pending, or from 

requesting that debtors bring a copy of 

a court document to the instructional 

course. Furthermore, the requirement 

that the certificate bear the instructor’s 

name is necessary to permit EOUST to 

confirm the quality of instruction by a 

particular instructor. 

36. Certificates—Legal Name 

[§ 58.35(m)] 

Comment: EOUST received several 

comments concerning the display of two 

names on the certificate when a third 

party (such as an attorney-in-fact acting 

under a valid power of attorney) 

completes instruction on behalf of the 

debtor. The comments expressed doubt 

that a certificate can display two names 

rather than one. Several comments 

expressed the opinion that, rather than 

leaving open the possibility that a third 

party can complete the course on behalf 

of the debtor under certain 

circumstances, the rule expressly 

should prohibit third parties from taking 

instruction on behalf of debtors. 

EOUST also received one comment 

recommending an amendment to the 

rule permitting the provider to ‘‘affix 

debtor’s name as it appears on debtor’s 

bankruptcy filing.’’ 

Response: Certificates may display 

more than one name (e.g., John Doe, as 

Attorney-In-Fact for Jane Doe). No 

clarification is necessary to permit such 

a display, and the display of both names 

removes the need for providers to 

engage in legal analysis concerning the 

proper party to list on the certificate, 

while providing full disclosure to courts 

and other parties concerning the 

debtor’s participation in instruction. 

Furthermore, EOUST declines to 

prohibit third parties from completing 

instruction on behalf of a debtor under 

appropriate circumstances, such as 

under a valid power of attorney 

sufficient to authorize the individual to 

file a bankruptcy petition on behalf of 

a client. To the extent state law 

authorizes powers of attorney, EOUST 

does not object to the completion of 

instruction by duly authorized 

attorneys-in-fact on behalf of debtors. 

No change to the rule is necessary to 

permit providers to affix a debtor’s 

name as it appears on the debtor’s 

bankruptcy filing. The debtor bears the 

burden of providing the provider with 

the proper name. 

37. Appeals [§ 58.36] 

Comment: One comment sought 

clarification concerning several aspects 


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of the appeal process. First, the 

comment requested inclusion of a 

specific statement that interim 

directives removing a provider from the 

approved list are rare and should be 

used only in extraordinary 

circumstances. Second, the comment 

also requested clarification that the 

appeal period begins to run upon the 

provider’s receipt of the United States 

Trustee’s removal decision, rather than 

from the date the United States Trustee 

made the decision. Finally, the 

comment sought to limit the authority of 

the Director to extend its review period 

due to exigent circumstances. 

Response: No change to the rule is 

necessary. First, by their nature, the 

specifically enumerated circumstances 

permitting interim directives ensure that 

only in limited circumstances will the 

United States Trustee remove a provider 

from the approved list pursuant to the 

interim directive procedure. Second, the 

rule provides that, to be timely, appeal 

documents shall be received not later 

than 21 calendar days from the date of 

the notice to the provider. The rule is 

unambiguous. The Director shall receive 

the documents within 21 calendar days 

of the date of the notice, even if the 

provider does not have 21 calendar days 

to respond. The rule also requires the 

United States Trustee to deliver removal 

documents to the provider by overnight 

courier to avoid loss of time and 

prejudice to the provider. Finally, the 

Director will generally not extend the 

deadline to issue a final decision unless 

the provider agrees to the extension of 

time. However, there may be 

circumstances where the Director needs 

to extend the deadline but the provider 

unreasonably declines to extend the 

deadline. In such instances, the Director 

must have the authority to extend the 

deadline to ensure that a thorough and 

fair consideration of the provider’s 

request for review has occurred before 

issuing a final decision. 

38. Appeals—Return of Client Fees 

[§ 58.36(q)(3)] 

Comment: One comment 

recommended extending the time for 

providers removed from the list of 

approved providers to explain why they 

require additional time to complete 

refunds to debtors. The comment also 

recommended changing the criteria for 

debtors eligible to receive a return of 

fees to those who had ‘‘substantially’’ 

received instruction, rather than those 

who had ‘‘completely’’ received 

instruction. 

Response: No change to the rule is 

necessary. EOUST will consider prompt 

and reasonable requests for extension of 

time and the rule already provides for 

the return of fees for anyone who has 

paid for services but not received them. 

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 (‘‘OMB’’). 

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 required costs for 

the submission of an application. Costs 

considered also include the cost of 

establishing and maintaining the 

approved list in each federal judicial 

district. In an effort to minimize the 

burden on applicants, the application 

keeps the number of items on the 

application to a minimum. 

The costs to an applicant of 

submitting an application will be 

minimal. The anticipated costs are the 

photocopying and mailing of the 

requested records, along with the 

salaries of the employees who complete 

the applications. Based upon the 

available information, experience with 

the instructional course industry, and 

informal communications with 

providers, EOUST anticipates that this 

cost for submitting an application 

should equal approximately $500 per 

application for providers. This cost is 

not new. It is the same cost that 

providers incurred when applying 

under the Interim Final Rule. 

Although providers may charge a fee 

for providing the financial management 

instructional course, providers must 

provide the instructional course without 

regard to a debtor’s ability to pay the fee 

in accordance with 11 U.S.C. 

111(d)(1)(E). Based upon the available 

information, current practice of many 

providers, experience with the 

instructional course industry, and 

informal communications with 

providers, $50 is presumed to be a 

reasonable fee for an instructional 

course. This rule does not prevent 

providers from charging more than $50. 

It requires providers to notify EOUST of 

any additional charge prior to 

implementing the additional fee and 

justify the additional cost to obtain 

EOUST approval for the increased fee. 

The amount presumed to be 

reasonable for instructional course fees 

will be reviewed one year after the 

effective date of this rule, and then 

periodically, but not less frequently 

than every four years. The amount 

presumed to be reasonable will be 

published by notice in the Federal 

Register and identified on the EOUST 

Web site. In addition, all providers must 

waive or reduce the fee if the debtor 

demonstrates a lack of ability to pay the 

fee, which shall be presumed if the 

debtor’s current household income is 

less than 150 percent of the poverty 

level, as adjusted from time to time, for 

a household or family of the size 

involved in the fee determination. A 

provider may rebut this presumption if 

the provider determines, based on 

financial information provided by the 

debtor in connection with instructional 

services, that the debtor is able to pay 

the fee in a reduced amount. Please refer 

to the Regulatory Flexibility Act section 

for a discussion on fees, fee waivers and 

fee reductions. 

Additionally, providers will incur de 

minimus recordkeeping costs. For 

instance, a provider will be required to 

maintain various records, such as 

records on which it relied in submitting 

its application; copies of the semiannual reports; records on instruction 

provided in languages other than 

English; fees, fee waiver and fee 

reduction statistics; complaints; and 

records enabling the provider to issue 

replacement certificates. All of these 

records combined should not equal 

more than a few pages or megabytes of 

information. Moreover, the increased 

specificity in this rule regarding records 

retention requirements reduce the 

burden on providers because the Interim 

Final Rule required providers to 

maintain records, but did not specify 

which records needed to be kept, nor for 

how long. With implementation of this 

rule, providers no longer need to keep 

every record for an unspecified amount 

of time in case such records are 

requested during an annual review or 

quality of service review. 

The number of applicants that will 

ultimately apply is unknown, though 

EOUST currently has approved 

approximately 270 providers. The 

annual hour burden on providers is 

estimated to be ten hours. This estimate 

is based on consultations with 

individuals in the instructional course 

industry, and experience with providers 

who completed the initial applications. 

EOUST consulted with the Federal 

Trade Commission and with the Internal 

Revenue Service in drafting this rule 

and concludes that the rule does not 

have an adverse effect upon either 

agency. 

The benefits of this rule include the 

development of standards that increase 


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consumer protections, such as a limit on 

the presumption of reasonable fees, and 

the requirement that providers give 

adequate disclosures concerning 

providers’ policies. These disclosures 

include notifying debtors that they may 

qualify for reduced or free services to 

further the BAPCPA’s requirement that 

services be provided without regard to 

ability to pay the fee. This rule also 

provides for greater supervision by the 

United States Trustee to ensure 

providers deliver effective instruction to 

debtors concerning personal financial 

management. Additionally, this rule 

assists in reducing fraud by requiring 

providers to identify debtors before 

providing an instructional course and 

corresponding certificate of completion. 

Another benefit of this rule is clarifying 

that providers who cannot provide 

instruction in the debtor’s language 

shall expeditiously direct the debtor to 

a provider who can provide services in 

the debtor’s language. These benefits 

justify the rule’s costs in complying 

with Congress’ mandate that a list of 

approved providers be established. 

Public Law 109–8, § 106(e)(1). 

Executive Order 13132 

This rule will not have a substantial 

direct effect 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 have 

been approved by OMB in accordance 

with the Paperwork Reduction Act of 

1995, 44 U.S.C. 3501 to 3520, and 

assigned OMB control number 1105– 

0085 for form EOUST–DE1, the 

‘‘Application for Approval as a Provider 

of a Personal Financial Management 

Instructional Course.’’ The Department 

notes that full notice and comment 

opportunities were provided to the 

general public through the Paperwork 

Reduction Act process, and that the 

application and associated requirements 

were modified to take into account the 

concerns of those who commented in 

this process. 

Regulatory Flexibility Act 

In accordance with the Regulatory 

Flexibility Act, 5 U.S.C. 605(b), the 

Director has reviewed this rule and, by 

approving it, certifies that although it 

will affect a substantial number of small 

entities, the rule will not have a 

significant economic impact upon them. 

This rule sets forth guidance 

concerning the reasonable fee a provider 

may charge (a presumptively reasonable 

fee of $50), and the criteria for 

determining fee waiver eligibility 

(presumed eligibility at household 

income of 150 percent of the poverty 

level). EOUST sought to establish formal 

guidance concerning fees, fee waivers 

and fee reductions based on a debtor’s 

‘‘ability to pay the fee’’ using objective 

criteria, taking into account the 

potential financial impact on the 

agencies as well as the needs of clients. 

11 U.S.C. 111(d)(1)(E). 

After carefully evaluating the 

financial management instructional 

course industry, EOUST based its fee 

guidance on current industry practice. 

Over 90 percent of approved providers 

charge $50 or less. According to a U.S. 

Government Accountability Office 

(‘‘GAO’’) report in 2007, the mean fee 

for providers among all providers was 

$43. See U.S. Gov’t Accountability 

Office, GAO–07–203, Bankruptcy 

Reform: Value of Credit Counseling 

Requirement is Not Clear 30 (2007) (the 

‘‘GAO Report’’). As of 2011, the mean 

fee for providers among all providers is 

$42. Among the ten largest providers (by 

certificate volume), nearly all charge 

$50 or less in fees. Only two of the ten 

largest providers charge more than $50 

(one of the providers in question 

charges $50, but increases the fee to $75 

for telephone instruction; the other 

provider charges $55, but increases the 

fee to $59 for telephone instruction). 

Four of the ten largest providers charge 

substantially less than $50: one charges 

$25; one charges $24; one charges $19; 

and the other charges $14.95. According 

to EOUST records, fee policies have not 

changed among the ten largest providers 

since 2006. 

In 2011, EOUST took a random 

sampling of ten providers that were not 

among the ten largest providers to 

determine these providers’ fees. Of these 

ten providers, one charges $50; one 

charges $40; one charges $37.50; one 

charges $35; four charge $25; one 

charges $9; and one is free of charge. 

Accordingly, a $50 presumptively 

reasonable fee not only strikes an 

appropriate balance between the 

financial condition of debtors and the 

financial viability of approved 

providers, but is generally equivalent to 

the general practice in the debtor 

education industry. Thus, establishing a 

presumptively reasonable fee of $50 

does not impose a significant economic 

impact on providers. Rather, it 

embodies a fee structure that 

encompasses that already widespread in 

the industry. 

Regarding fee waivers, similar to the 

requirement to charge ‘‘reasonable’’ fees, 

the requirement to waive fees when a 

client cannot pay is mandated by 

statute. 11 U.S.C. 111(d)(1)(E). With 

respect to the development of the fee 

waiver standard, the GAO undertook a 

study concerning, among other things, 

the incidence of fee waivers based on 

ability to pay. The GAO noted that the 

Interim Final Rule did not provide 

specific guidance on the criteria 

providers should use to determine a 

client’s ability to pay. See GAO Report 

at 29–32. The GAO noted variations in 

the rate of fee waivers and 

recommended that EOUST adopt clearer 

guidance to providers to reduce 

uncertainty among providers concerning 

appropriate fee waiver criteria, to 

improve transparency concerning 

EOUST’s assessment of fee waiver 

policies, and to increase the availability 

of fee waivers by setting clear minimum 

benchmarks for ability to pay. Id. at 32, 

40–41. 

Among the ten largest providers, six 

use household income at or below 150 

percent of the poverty level as the 

threshold for determining eligibility for 

a fee waiver. Two providers consider 

the debtor’s income and whether the 

debtor was granted a court fee waiver; 

one provider uses 100 percent of 

poverty level; and one provider assesses 

the debtor’s housing status and 

existence of severe hardship. In 2011, 

EOUST took a random sampling of ten 

providers that were not among the ten 

largest providers to determine these 

providers’ fee waiver policies. Half of 

the providers use the 150 percent of 

poverty level standard; one provider 

uses the in forma pauperis or pro bono 

standard without specifying 150 

percent; two providers use 100 percent 

of the poverty level; one provider uses 

200 percent of the poverty level; and 

one provider does not charge a fee for 

its instructional course. 

In the proposed rule, EOUST 

proposed a bright-line standard 

establishing entitlement to a fee waiver 

for debtors with household income 

equal to or less than 150 percent of the 

poverty level. That standard was based 

on the in forma pauperis standard set 

forth in 28 U.S.C. 1930(f)(1), which 

permits the bankruptcy court to waive 

filing fees for eligible individuals. The 

proposed rule standard did not grant 

debtors the discretion to determine 

whether clients otherwise were able to 

pay the fees. 

Subsequently, EOUST received and 

considered comments to the proposed 

rule. EOUST agreed that 


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implementation of the proposed 

standardized fee waiver raised some 

policy concerns. Because 

standardization fails to take into 

account local differences, disparate 

impact on providers may result when 

providers located in geographic areas of 

concentrated low income individuals 

are required to grant fee waivers at a 

higher rate than those in more affluent 

areas. Although a provider may apply to 

EOUST to increase its fee by 

demonstrating that its costs of 

delivering services (including 

opportunity costs associated with 

waived or reduced fees) justify the 

proposed fee, increases in fees 

ultimately shift the fee burden to those 

debtors more able to pay. As of July 

2009, according to self-reporting by 

approved debtor education providers, 

without the proposed mandatory fee 

waiver, 12.2 percent of certificates were 

issued at no cost, with another 13.9 

percent issued at reduced cost. In 

comparison, based on available data 

from 2005, approximately 30 percent of 

chapter 7 debtors were eligible to apply 

for a waiver of the court filing fee 

pursuant to the 150 percent in forma 

pauperis standard. Based on this 

analysis, EOUST concluded that if 

providers were subject to a mandatory 

fee waiver policy with respect to all 

such debtors based on the in forma 

pauperis standard, some providers 

might suffer financial losses that would 

render them unable to provide services, 

reducing capacity to serve the overall 

debtor population. 

Accordingly, EOUST revised this rule 

to include a rebuttable presumption to 

the objective fee waiver standard. In 

adopting the presumption, EOUST seeks 

to balance the need for an objective fee 

waiver standard and complying with 11 

U.S.C. 111(d)(1)(E) with providers’ need 

to collect adequate fees for services 

provided. Under the rebuttable 

presumption, a debtor with household 

income equal to or less than 150 percent 

of the poverty level is presumptively 

entitled to a fee waiver, but the provider 

may determine, based on information it 

receives from the debtor, that the debtor 

actually is able to pay the fee in part. In 

that case, the provider may charge the 

debtor a reduced fee, taking into 

account the debtor’s actual ability to 

pay. This rebuttable presumption 

balances the need for an objective fee 

waiver standard, consumer protection, 

and the need to ensure provider 

compliance with the Bankruptcy Code 

with the providers’ need to collect 

adequate fees. 

Additionally, although EOUST 

considered indexing fee waivers to 

debtor income, EOUST determined that 

such an indexing system fails to take 

into account the variation in ability to 

pay for debtors at the same income 

level. For example, two debtors may 

have income at 150 percent of the 

poverty level, but one debtor lives in a 

rent-free home and has few expenses 

while the other has significant expenses, 

such as accumulated medical debts or 

child support payments. An inflexible 

indexing standard does not take into 

account the individual’s actual ability to 

pay the fee, as set forth in 11 U.S.C. 

111(d)(1)(E). EOUST concluded that 

each provider should determine each 

debtor’s eligibility based on the debtor’s 

individual financial circumstances. 

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. 

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 

($100 million). 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, 5 U.S.C. 801 et 

seq. This rule will not result in an 

annual effect on the economy of $100 

million or more; a major increase in 

costs or prices; or significant adverse 

effects on competition, employment, 

investment, productivity, and 

innovation; or on the ability of United 

States-based companies to compete with 

foreign-based companies in domestic 

and export markets. 

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 United States 

Trustee to approve providers of a 

personal financial management 

instructional course. The United States 

Trustee will not share this information 

with any other entity unless authorized 

under the Privacy Act, 5 U.S.C. 552a et 

seq. EOUST has published a System of 

Records Notice that delineates the 

routine use exceptions authorizing 

disclosure of information. 71 FR 59,818, 

59,827 (Oct. 11, 2006), JUSTICE/UST– 

005, Credit Counseling and Debtor 

Education Files and Associated Records. 

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 section 7701 of title 31, 

United States Code. 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 and 

debts. 

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] 

■ 1. The authority citation for Part 58 

continues to read as follows: 

Authority: 5 U.S.C. 301, 552; 11 U.S.C. 

109(h), 111, 521(b), 727(a)(11), 1141(d)(3), 

1202, 1302, 1328(g), 28 U.S.C. 509, 510, 586, 

589b. 

■ 2. Sections 58.25 through 58.27 are 

revised to read as follows: 

§ 58.25 Definitions. 

(a) The following definitions apply to 

§§ 58.25 through and including 58.36 of 

this Part, as well as the applications and 

other materials providers submit in an 

effort to establish they meet the 

requirements necessary to become an 

approved provider of a personal 

financial management instructional 

course. 

(b) These terms shall have these 

meanings: 

(1) The term ‘‘accreditation’’ means 

the recognition or endorsement that an 

accrediting organization bestows upon a 

provider because the accrediting 

organization has determined the 

provider meets or exceeds all the 

accrediting organization’s standards; 

(2) The term ‘‘accrediting 

organization’’ means either an entity 

that provides accreditation to providers 

or provides certification to instructors, 

provided, however, that an accrediting 

organization shall: 

(i) Not be a provider or affiliate of any 

provider; and 

(ii) Be deemed acceptable by the 

United States Trustee; 

(3) The term ‘‘affiliate’’ means: 

(i) Every entity that is an affiliate of 

the provider, as the term ‘‘affiliate’’ is 

defined in 11 U.S.C. 101(2), except that 

the word ‘‘provider’’ shall be substituted 


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for the word ‘‘debtor’’ in 11 U.S.C. 

101(2); 

(ii) Each of a provider’s officers and 

each of a provider’s directors; and 

(iii) Every relative of a provider’s 

officers and every relative of a 

provider’s directors; 

(4) The term ‘‘application’’ means the 

application and related forms, including 

appendices, approved by the Office of 

Management and Budget as form 

EOUST–DE1, Application for Approval 

as a Provider of a Personal Financial 

Management Instructional Course, as it 

shall be amended from time to time; 

(5) The term ‘‘approved list’’ means 

the list of providers currently approved 

by a United States Trustee under 11 

U.S.C. 111 as currently published on the 

United States Trustee Program’s Internet 

site, which is located on the United 

States Department of Justice’s Internet 

site; 

(6) The term ‘‘approved provider’’ 

means a provider currently approved by 

a United States Trustee under 11 U.S.C. 

111 as an approved provider of a 

personal financial management 

instructional course eligible to be 

included on one or more lists 

maintained under 11 U.S.C. 111(a)(1); 

(7) The term ‘‘certificate’’ means the 

document an approved provider shall 

provide to a debtor after the debtor 

completes an instructional course, if the 

approved provider does not notify the 

appropriate bankruptcy court in 

accordance with the Federal Rules of 

Bankruptcy Procedure that a debtor has 

completed the instructional course; 

(8) The term ‘‘debtor’’ shall have the 

meaning given that term in 11 U.S.C. 

101(13), to the extent that individual 

has sought an instructional course from 

an approved provider; 

(9) The term ‘‘Director’’ means the 

person designated or acting as the 

Director of the Executive Office for 

United States Trustees; 

(10) The term ‘‘effective instruction’’ 

means the actual receipt of an 

instructional course by a debtor from an 

approved provider, and all other 

applicable services, rights, and 

protections specified in: 

(i) 11 U.S.C. 111; and 

(ii) this part; 

(11) The term ‘‘entity’’ shall have the 

meaning given that term in 11 U.S.C. 

101(15); 

(12) The terms ‘‘fee’’ and ‘‘fee policy’’ 

each mean the aggregate of all fees an 

approved provider charges debtors for 

providing an instructional course, 

including the fees for any materials; ‘‘fee 

policy’’ shall also mean the objective 

criteria the provider uses in determining 

whether to waive or reduce any fee, 

contribution, or payment; 

(13) The term ‘‘final decision’’ means 

the written determination issued by the 

Director based upon the review of the 

United States Trustee’s decision either 

to deny a provider’s application or to 

remove an approved provider from the 

approved list; 

(14) The term ‘‘financial benefit’’ 

means any interest equated with money 

or its equivalent, including, but not 

limited to, stocks, bonds, other 

investments, income, goods, services, or 

receivables; 

(15) The term ‘‘governmental unit’’ 

shall have the meaning given that term 

in 11 U.S.C. 101(27); 

(16) The term ‘‘independent 

contractor’’ means a person or entity 

who provides any goods or services to 

an approved provider other than as an 

employee and as to whom the approved 

provider does not: 

(i) Direct or control the means or 

methods of delivery of the goods or 

services being provided; 

(ii) Make financial decisions 

concerning the business aspects of the 

goods or services being provided; and 

(iii) Have any common employees; 

(17) The term ‘‘instructional course’’ 

means a course in personal financial 

management that is approved by the 

United States Trustee under 11 U.S.C. 

111 and this part, including the learning 

materials and methodologies in 

§ 58.33(f), which is to be taken and 

completed by the debtor after the filing 

of a bankruptcy petition and before 

receiving a discharge under 11 U.S.C. 

727(a)(11), 1141(d)(3) or 1328(g)(1); 

(18) The term ‘‘instructor’’ means an 

individual who teaches, presents or 

explains substantive instructional 

course materials to debtors, whether 

provided in person, by telephone, or 

through the Internet; 

(19) The term ‘‘languages offered’’ 

means every language other than 

English in which an approved provider 

offers an instructional course; 

(20) The term ‘‘legal advice’’ shall 

have the meaning given that term in 11 

U.S.C. 110(e)(2); 

(21) The term ‘‘limited English 

proficiency’’ refers to individuals who: 

(i) Do not speak English as their 

primary language; and 

(ii) Have a limited ability to read, 

write, speak, or understand English; 

(22) The term ‘‘material change’’ 

means, alternatively, any change: 

(i) In the name, structure, principal 

contact, management, instructors, 

physical location, instructional course, 

fee policy, language services, or method 

of delivery of an approved provider; or 

(ii) That renders inapplicable, 

inaccurate, incomplete, or misleading 

any statement a provider previously 

made: 

(A) In its application or related 

materials; or 

(B) To the United States Trustee; 

(23) The term ‘‘method of delivery’’ 

means one or more of the three methods 

by which an approved provider can 

provide some component of an 

instructional course to debtors, 

including: 

(i) ‘‘In person’’ delivery, which 

applies when a debtor primarily 

receives an instructional course at a 

physical location with an instructor 

physically present in that location, and 

with the instructor providing oral and/ 

or written communication to the debtor 

at the facility; 

(ii) ‘‘Telephone’’ delivery, which 

applies when a debtor primarily 

receives an instructional course by 

telephone; and 

(iii) ‘‘Internet’’ delivery, which 

applies when a debtor primarily 

receives an instructional course through 

an Internet Web site; 

(24) The term ‘‘notice’’ in § 58.36 

means the written communication from 

the United States Trustee to a provider 

that its application to become an 

approved provider has been denied or to 

an approved provider that it is being 

removed from the approved list; 

(25) The term ‘‘provider’’ shall mean 

any entity that is applying under this 

part for United States Trustee approval 

to be included on a publicly available 

list in one or more United States district 

courts, as authorized by 11 U.S.C. 

111(a)(1), and shall also mean, 

whenever appropriate, an approved 

provider; 

(26) The term ‘‘referral fees’’ means 

money or any other valuable 

consideration paid or transferred 

between an approved provider and 

another entity in return for that entity, 

directly or indirectly, identifying, 

referring, securing, or in any other way 

encouraging any debtor to receive an 

instructional course from the approved 

provider; 

(27) The term ‘‘relative’’ shall have 

the meaning given that term in 11 U.S.C. 

101(45); 

(28) The term ‘‘request for review’’ 

means the written communication from 

a provider to the Director seeking 

review of the United States Trustee’s 

decision either to deny the provider’s 

application or to remove the provider 

from the approved list; 

(29) The term ‘‘state’’ means state, 

commonwealth, district, or territory of 

the United States; 

(30) The term ‘‘United States Trustee’’ 

means, alternatively: 

(i) The Executive Office for United 

States Trustees; 


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(ii) A United States Trustee appointed 

under 28 U.S.C. 581; 

(iii) A person acting as a United States 

Trustee; 

(iv) An employee of a United States 

Trustee; or 

(v) Any other entity authorized by the 

Attorney General to act on behalf of the 

United States under this part. 

§ 58.26 Procedures all providers shall 

follow when applying to become approved 

providers. 

(a) A provider applying to become an 

approved provider shall obtain an 

application, including appendices, from 

the United States Trustee. 

(b) The provider shall complete the 

application, including its appendices, 

and attach the required supporting 

documents requested in the application. 

(c) The provider shall submit the 

original of the completed application, 

including completed appendices and 

the required supporting documents, to 

the United States Trustee at the address 

specified on the application form. 

(d) The application shall be signed by 

a representative of the provider who is 

authorized under applicable law to sign 

on behalf of the applying provider. 

(e) The signed application, completed 

appendices, and required supporting 

documents shall be accompanied by a 

writing, signed by the signatory of the 

application and executed on behalf of 

the signatory and the provider, 

certifying the application does not: 

(1) Falsify, conceal, or cover up by 

any trick, scheme or device a material 

fact; 

(2) Make any materially false, 

fictitious, or fraudulent statement or 

representation; or 

(3) Make or use any false writing or 

document knowing the same to contain 

any materially false, fictitious, or 

fraudulent statement or entry. 

(f) The United States Trustee shall not 

consider an application, and it may be 

returned if: 

(1) It is incomplete; 

(2) It fails to include the completed 

appendices or all of the required 

supporting documents; or 

(3) It is not accompanied by the 

certification identified in the preceding 

subsection. 

(g) The United States Trustee shall not 

consider an application on behalf of a 

provider, and it shall be returned if: 

(1) It is submitted by any entity other 

than the provider; or 

(2) Either the application or the 

accompanying certification is executed 

by any entity other than a representative 

of the provider who is authorized under 

applicable law to sign on behalf of the 

provider. 

(h) By the act of submitting an 

application, a provider consents to the 

release and disclosure of its name, 

contact information, and nonconfidential business information 

relating to the services it provides on 

the approved list should its application 

be approved. 

§ 58.27 Automatic expiration of providers’ 

status as approved providers. 

(a) Except as provided in § 58.28(c), if 

an approved provider was not an 

approved provider immediately prior to 

the date it last obtained approval to be 

an approved provider, such an approved 

provider shall cease to be an approved 

provider six months from the date on 

which it was approved unless the 

United States Trustee approves an 

additional one year period. 

(b) Except as provided in § 58.28(c), if 

an approved provider was an approved 

provider immediately prior to the date 

it last obtained approval to be an 

approved provider, such a provider 

shall cease to be an approved provider 

one year from the date on which it was 

last approved to be an approved 

provider unless the United States 

Trustee approves an additional one year 

period. 

■ 3. Sections 58.28 through 58.36 are 

added and read as follows: 

§ 58.28 Procedures all approved providers 

shall follow when applying for approval to 

act as an approved provider for an 

additional one year period. 

(a) To be considered for approval to 

act as an approved provider for an 

additional one year term, an approved 

provider shall reapply by complying 

with all the requirements specified for 

providers under 11 U.S.C. 111, and 

under this part. 

(b) Such a provider shall apply no 

later than 45 days prior to the expiration 

of its six month probationary period or 

annual period to be considered for 

approval for an additional one year 

period, unless a written extension is 

granted by the United States Trustee. 

(c) An approved provider that has 

complied with all prerequisites for 

applying to act as an approved provider 

for an additional one year period may 

continue to operate as an approved 

provider while its application is under 

review by the United States Trustee, so 

long as either the application for an 

additional one year period is timely 

submitted, or a provider receives a 

written extension from the United States 

Trustee. 

§ 58.29 Renewal for an additional one year 

period. 

If an approved provider’s application 

for an additional one year period is 

approved, such renewal period shall 

begin to run from the later of: 

(a) The day after the expiration date 

of the immediately preceding approval 

period; or 

(b) The actual date of approval of such 

renewal by the United States Trustee. 

§ 58.30 Mandatory duty of approved 

providers to notify United States Trustees 

of material changes. 

(a) An approved provider shall 

immediately notify the United States 

Trustee in writing of any material 

change. 

(b) An approved provider shall 

immediately notify the United States 

Trustee in writing of any failure by the 

approved provider to comply with any 

standard or requirement specified in 11 

U.S.C. 111, this part, or the terms under 

which the United States Trustee 

approved it to act as an approved 

provider. 

(c) An approved provider shall 

immediately notify the United States 

Trustee in writing of any of the 

following events: 

(1) Cessation of business by the 

approved provider or by any office of 

the provider, or withdrawal from any 

federal judicial district(s) where the 

approved provider is approved; 

(2) Any investigation of, or any 

administrative or judicial action brought 

against, the approved provider by any 

governmental unit; 

(3) Any action by a governmental unit 

or a court to suspend or revoke the 

approved provider’s articles of 

incorporation, or any license held by the 

approved provider, or any authorization 

necessary to engage in business; or 

(4) A suspension, or action to 

suspend, any accreditation held by the 

approved provider, or any withdrawal 

by the approved provider of any 

application for accreditation, or any 

denial of any application of the 

approved provider for accreditation; or 

(5) [reserved]. 

(d) A provider shall notify the United 

States Trustee in writing if any of the 

changes identified in paragraphs (a) 

through (c) of this section occur while 

its application to become an approved 

provider is pending before the United 

States Trustee. 

(e) An approved provider whose name 

or other information appears incorrectly 

on the approved list shall immediately 

submit a written request to the United 

States Trustee asking that the 

information be corrected. 


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§ 58.31 Mandatory duty of approved 

providers to obtain prior consent of the 

United States Trustee before taking certain 

actions. 

(a) By accepting the designation to act 

as an approved provider, a provider 

agrees to obtain approval from the 

United States Trustee, prior to making 

any of the following changes: 

(1) The engagement of an independent 

contractor to provide an instructional 

course; 

(2) Any increase in the fees received 

from debtors for an instructional course 

or a change in the provider’s fee policy; 

(3) Expansion into additional federal 

judicial districts; 

(4) Any changes to the method of 

delivery the approved provider employs 

to provide an instructional course; or 

(5) Any changes in the approved 

provider’s instructional course. 

(b) A provider applying to become an 

approved provider shall also obtain 

approval from the United States Trustee 

before taking any action specified in 

paragraph (a) of this section. It shall do 

so by submitting an amended 

application. The provider’s amended 

application shall be accompanied by a 

contemporaneously executed writing, 

signed by the signatory of the 

application, that makes the 

certifications specified in § 58.26(e). 

(c) An approved provider shall not 

transfer or assign its United States 

Trustee approval to act as an approved 

provider. 

§ 58.32 Continuing requirements for 

becoming and remaining approved 

providers. 

(a) To become an approved provider, 

a provider must affirmatively establish, 

to the satisfaction of the United States 

Trustee, that the provider at the time of 

approval: 

(1) Satisfies every requirement of this 

part; and 

(2) Provides effective instruction to its 

debtors. 

(b) To remain an approved provider, 

an approved provider shall affirmatively 

establish, to the satisfaction of the 

United States Trustee, that the approved 

provider: 

(1) Has satisfied every requirement of 

this part; 

(2) Has provided effective instruction 

to its debtors; and 

(3) Will continue to satisfy both 

paragraphs (b)(1) and (2) of this section 

in the future. 

§ 58.33 Minimum qualifications providers 

shall meet to become and remain approved 

providers. 

To meet the minimum qualifications 

set forth in § 58.32, and in addition to 

the other requirements set forth in this 

part, providers and approved providers 

shall comply with paragraphs (a) 

through (n) of this section on a 

continuing basis: 

(a) Compliance with all laws. A 

provider shall comply with all 

applicable laws and regulations of the 

United States and each state in which 

the provider provides an instructional 

course including, without limitation, all 

laws governing licensing and 

registration. 

(b) Prohibition on legal advice. A 

provider shall not provide legal advice. 

(c) Ethical standards. A provider 

shall: 

(1) Ensure no member of the board of 

directors or trustees, officer or 

supervisor is a relative of an employee 

of the United States Trustee, a trustee 

appointed under 28 U.S.C. 586(a)(1) for 

any federal judicial district where the 

provider is providing or is applying to 

provide an instructional course, a 

federal judge in any federal judicial 

district where the provider is providing 

or is applying to provide an 

instructional course, or a federal court 

employee in any federal judicial district 

where the provider is providing or is 

applying to provide an instructional 

course; 

(2) Not enter into any referral 

agreement or receive any financial 

benefit that involves the provider 

paying to or receiving from any entity or 

person referral fees for the referral of 

debtors to or by the provider; and 

(3) Not enter into agreements 

involving an instructional course that 

create a conflict of interest; and 

(4) Not contact any debtor utilizing 

the United States Postal Service, or 

other mail carrier, or electronic mail for 

the purpose of soliciting debtors to 

utilize the provider’s instructional 

course, unless: 

(i) Any such solicitations include the 

phrase ‘‘This is an advertisement for 

services’’ or ‘‘This is a solicitation;’’ 

(ii) Prominently displayed at the 

beginning of each page of the 

solicitation; 

(iii) In a font size larger than or equal 

to the largest font size otherwise used in 

the solicitation; 

(iv) Any such solicitations include 

only logos, seals, or similar marks that 

are substantially dissimilar to the logo, 

seal, or similar mark of any agency or 

court of the United States government, 

including but not limited to the United 

States Trustee Program. 

(d) Instructor training, certification 

and experience. A provider shall: 

(1) Use only instructors who possess 

adequate experience providing an 

instructional course, which shall mean 

that each instructor either: 

(i) Holds one of the certifications 

listed below and who has complied 

with all continuing education 

requirements necessary to maintain that 

certification: 

(A) Certified as a Certified Financial 

Planner; 

(B) Certified as a credit counselor by 

an accrediting organization; 

(C) Registered as a Registered 

Financial Consultant; or 

(D) Certified as a Certified Public 

Accountant; or 

(ii) Has successfully completed a 

course of study or worked a minimum 

of six months in a related area such as 

personal finance, budgeting, or credit or 

debt management. A course of study 

must include training in personal 

finance, budgeting, or credit or debt 

management. An instructor shall also 

receive annual continuing education in 

the areas of personal finance, budgeting, 

or credit or debt management; 

(2) Demonstrate adequate experience, 

background, and quality in providing an 

instructional course, which shall mean 

that, at a minimum, the provider shall 

either: 

(i) Have experience in providing an 

instructional course for the two years 

immediately preceding the relevant 

application date; or 

(ii) For each office providing an 

instructional course, employ at least one 

supervisor who has met the 

qualifications in paragraph (d)(2)(i) of 

this section for no fewer than two of the 

five years preceding the relevant 

application date; and 

(iii) If offering any component of an 

instructional course by a telephone or 

Internet method of delivery, use only 

instructors who, in addition to all other 

requirements, demonstrate sufficient 

experience and proficiency in providing 

such an instructional course by those 

methods of delivery, including 

proficiency in employing verification 

procedures to ensure the person 

receiving the instructional course is the 

debtor, and to determine whether the 

debtor has completely received an 

instructional course. 

(e) Use of the telephone and the 

Internet to deliver a component of an 

instructional course. A provider shall: 

(1) Not provide any debtor a 

diminished instructional course because 

the debtor receives any portion of the 

instructional course by telephone or 

Internet; 

(2) Confirm the identity of the debtor 

before commencing an instructional 

course by telephone or Internet by: 

(i) Obtaining one or more unique 

personal identifiers from the debtor and 

assigning an individual access code, 


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user ID, or password at the time of 

enrollment; 

(ii) Requiring the debtor to provide 

the appropriate access code, user ID, or 

password, and also one or more of the 

unique personal identifiers during the 

course of delivery of the instructional 

course; and 

(iii) Employing adequate means to 

measure the time spent by the debtor to 

complete the instructional course. 

(f) Learning materials and 

methodologies. A provider shall provide 

learning materials to assist debtors in 

understanding personal financial 

management and that are consistent 

with 11 U.S.C. 111, and this part, 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; and 

(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; and 

(iv) Saving for emergencies, for 

periodic payments, and for financial 

goals; 

(3) Wise use of credit, which consists 

of the following: 

(i) Identifying the types, sources, and 

costs of credit and loans; 

(ii) Identifying debt warning signs; 

(iii) Discussing appropriate use of 

credit and alternatives to credit use; and 

(iv) Checking a credit rating; 

(4) Consumer information, which 

consists of the following: 

(i) Identifying public and nonprofit 

resources for consumer assistance; and 

(ii) Identifying applicable consumer 

protection laws and regulations, such as 

those governing correction of a credit 

record and protection against consumer 

fraud; and 

(5) Coping with unexpected financial 

crisis, which consists of the following: 

(i) Identifying alternatives to 

additional borrowing in times of 

unanticipated events; and 

(ii) Seeking advice from public and 

private service agencies for assistance. 

(g) Course procedures. 

(1) Generally, a provider shall: 

(i) Ensure the instructional course 

contains sufficient learning materials 

and teaching methodologies so that the 

debtor receives a minimum of two hours 

of instruction, regardless of the method 

of delivery of the course; 

(ii) Use its best efforts to collect from 

each debtor a completed course 

evaluation at the end of the 

instructional course. At a minimum, the 

course evaluation shall include the 

information contained in Appendix E of 

the application to evaluate the 

effectiveness of the instructional course; 

(2) For an instructional course 

delivered in person, the provider shall: 

(i) Ensure that an instructor is present 

to instruct and interact with debtors; 

and 

(ii) Limit class size to ensure an 

effective presentation of the 

instructional course materials; 

(3) For instructional courses delivered 

by the telephone, the provider shall: 

(i) Ensure an instructor is 

telephonically present to instruct and 

interact with debtors; 

(ii) Provide learning materials to 

debtors before the telephone 

instructional course session; 

(iii) Incorporate tests into the 

curriculum that support the learning 

materials, ensure completion of the 

course, and measure comprehension; 

(iv) Ensure review of tests prior to the 

completion of the instructional course; 

and 

(v) Ensure direct oral communication 

from an instructor by telephone or in 

person with all debtors who fail to 

complete the test in a satisfactory 

manner or who receive less than a 70 

percent score; 

(4) For instructional courses delivered 

through the Internet, the provider shall: 

(i) Comply with § 58.33(g)(3)(iii), (iv), 

and (v); provided, however, that to the 

extent instruction takes place by 

Internet, the provider may comply with 

§ 58.33(g)(3)(v) by ensuring direct 

communication from an instructor by 

electronic mail, live chat, or telephone; 

and 

(ii) Respond to a debtor’s questions or 

comments within one business day. 

(h) Services to hearing and hearingimpaired debtors. A provider shall 

furnish toll-free telephone numbers for 

both hearing and hearing-impaired 

debtors whenever telephone 

communication is required. The 

provider shall provide telephone 

amplification, sign language services, or 

other communication methods for 

hearing-impaired debtors. 

(i) [reserved]. 

(j) Services to debtors with special 

needs. A provider that provides any 

portion of its instructional course in 

person shall comply with all federal, 

state and local laws governing facility 

accessibility. A provider shall also 

provide or arrange for communication 

assistance for debtors with special needs 

who have difficulty making their service 

needs known. 

(k) Mandatory disclosures to debtors. 

Prior to providing any information to or 

obtaining any information from a 

debtor, and prior to delivering an 

instructional course, a provider shall 

disclose: 

(1) The provider’s fee policy, 

including any fees associated with 

generation of the certificate; 

(2) The provider’s policies enabling 

debtors to obtain an instructional course 

for free or at reduced rates based upon 

the debtor’s lack of ability to pay. To the 

extent an approved provider publishes 

information concerning its fees on the 

Internet, such fee information must 

include the provider’s policies enabling 

debtors to obtain an instructional course 

for free or at reduced rates based upon 

the debtor’s lack of ability to pay; 

(3) The provider’s policy to provide 

free bilingual instruction or professional 

interpreter assistance to any limited 

English proficient debtor; 

(4) The instructors’ qualifications; 

(5) The provider’s policy prohibiting 

it from paying or receiving referral fees 

for the referral of debtors; 

(6) The provider’s obligation to 

provide a certificate to the debtor 

promptly upon the completion of an 

instructional course; 

(7) The fact that the provider might 

disclose debtor information to the 

United States Trustee in connection 

with the United States Trustee’s 

oversight of the provider, or during the 

investigation of complaints, during onsite visits, or during quality of service 

reviews; 

(8) The fact that the United States 

Trustee has reviewed only the 

provider’s instructional course (and, if 

applicable, its services as a credit 

counseling agency pursuant to 11 U.S.C. 

111(c)), and the fact that the United 

States Trustee has neither reviewed nor 

approved any other services the 

provider provides to debtors; and 

(9) The fact that a debtor will only 

receive a certificate if the debtor 

completes an instructional course. 

(l) Complaint Procedures. A provider 

shall employ complaint procedures that 

adequately respond to debtors’ 

concerns. 

(m) Provider records. A provider shall 

prepare and retain records that enable 

the United States Trustee to evaluate 

whether the provider is providing 

effective instruction and acting in 


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compliance with all applicable laws and 

this part. All records, including 

documents bearing original signatures, 

shall be maintained in either hard copy 

form or electronically in a format widely 

available commercially. Records that the 

provider shall prepare and retain for a 

minimum of two years, and permit 

review of by the United States Trustee 

upon request, shall include: 

(1) Upon the filing of an application 

for probationary approval, all 

information requested by the United 

States Trustee as an estimate, projected 

to the end of the probationary period, in 

the form requested by the United States 

Trustee; 

(2) After probationary or annual 

approval, and for so long as the provider 

remains on the approved list, semiannual reports of historical data (for the 

periods ending June 30 and December 

31 of each year), of the type and in the 

form requested by the United States 

Trustee; these reports shall be submitted 

within 30 days of the end of the 

applicable periods specified in this 

paragraph; 

(3) Records concerning the delivery of 

services to debtors with limited English 

proficiency and special needs, and to 

hearing-impaired debtors, including 

records: 

(i) Of the number of such debtors, and 

the methods of delivery used with 

respect to such debtors; 

(ii) Of which languages are offered or 

requested, and the type of language 

support used or requested by such 

debtors (e.g., bilingual instructor, inperson or telephone interpreter, 

translated Web instruction); 

(iii) Detailing the provider’s provision 

of services to such debtors; and 

(iv) Supporting any justification if the 

provider did not provide services to 

such debtors, including the number of 

debtors not served, the languages 

involved, and the number of referrals 

provided; 

(4) Records concerning the delivery of 

an instructional course to debtors for 

free or at reduced rates based upon the 

debtor’s lack of ability to pay, including 

records of the number of debtors for 

whom the provider waived all of its fees 

under § 58.34(b)(1)(i), the number of 

debtors for whom the provider waived 

all or part of its fees under 

§ 58.34(b)(1)(ii), and the number of 

debtors for whom the provider 

voluntarily waived all or part of its fees 

under § 58.34(c); 

(5) Records of complaints and the 

provider’s responses thereto; 

(6) Records that enable the provider to 

verify the authenticity of certificates 

their debtors file in bankruptcy cases; 

and 

(7) Records that enable the provider to 

issue replacement certificates. 

(n) Additional minimum 

requirements. A provider shall: 

(1) Provide records to the United 

States Trustee upon request; 

(2) Cooperate with the United States 

Trustee by allowing scheduled and 

unscheduled on-site visits, complaint 

investigations, or other reviews of the 

provider’s qualifications to be an 

approved provider; 

(3) Cooperate with the United States 

Trustee by promptly responding to 

questions or inquiries from the United 

States Trustee; 

(4) Assist the United States Trustee in 

identifying and investigating suspected 

fraud and abuse by any party 

participating in the instructional course 

or bankruptcy process; 

(5) Take no action that would limit, 

inhibit, or prevent a debtor from 

bringing an action or claim for damages 

against a provider, as provided in 11 

U.S.C. 111(g)(2); 

(6) Refer debtors seeking an 

instructional course only to providers 

that have been approved by a United 

States Trustee to provide such services; 

(7) Comply with the United States 

Trustee’s directions on approved 

advertising, including without 

limitation those set forth in Appendix A 

to the application; 

(8) Not disclose or provide to a credit 

reporting agency any information 

concerning whether a debtor has 

received or sought instruction 

concerning personal financial 

management from a provider; 

(9) Not expose the debtor to 

commercial advertising as part of or 

during the debtor’s receipt of an 

instructional course, and never market 

or sell financial products or services 

during the instructional course 

provided, however, this provision does 

not prohibit a provider from generally 

discussing all available financial 

products and services; 

(10) Not sell information about any 

debtor to any third party without the 

debtor’s prior written permission; 

(11) Comply with the requirements 

elsewhere in this part concerning fees 

for the instructional course and fee 

waiver policies; and 

(12) Comply with the requirements 

elsewhere in this part concerning 

certificates. 

§ 58.34 Minimum requirements to become 

and remain approved providers relating to 

fees. 

(a) If a fee for, or relating to, an 

instructional course is charged by a 

provider, such fee shall be reasonable: 

(1) A fee of $50 or less for an 

instructional course is presumed to be 

reasonable and a provider need not 

obtain prior approval of the United 

States Trustee to charge such a fee; 

(2) A fee exceeding $50 for an 

instructional course is not presumed to 

be reasonable and a provider must 

obtain prior approval from the United 

States Trustee to charge such a fee. The 

provider bears the burden of 

establishing that its proposed fee is 

reasonable. At a minimum, the provider 

must demonstrate that its cost for 

delivering the instructional course 

justifies the fee. A provider that 

previously received permission to 

charge a higher fee need not reapply for 

permission to charge that fee during the 

provider’s annual review. Any new 

requests for permission to charge more 

than previously approved, however, 

must be submitted to EOUST for 

approval; and 

(3) The United States Trustee shall 

review the amount of the fee set forth in 

paragraphs (a)(1) and (2) of this section 

one year after the effective date of this 

part and then periodically, but not less 

frequently than every four years, to 

determine the reasonableness of the fee. 

Fee amounts and any revisions thereto 

shall be determined by current costs, 

using a method of analysis consistent 

with widely accepted accounting 

principles and practices, and calculated 

in accordance with the provisions of 

federal law as applicable. Fee amounts 

and any revisions thereto shall be 

published in the Federal Register. 

(b)(1) A provider shall waive the fee 

in whole or in part whenever a debtor 

demonstrates a lack of ability to pay the 

fee. 

(i) A debtor presumptively lacks the 

ability to pay the fee if the debtor’s 

household current income is less than 

150 percent of the poverty guidelines 

updated periodically in the Federal 

Register by the U.S. Department of 

Health and Human Services under the 

authority of 42 U.S.C. 9902(2), as 

adjusted from time to time, for a 

household or family of the size involved 

in the fee determination. 

(ii) The presumption shall be 

rebutted, and the provider may charge 

the debtor a reduced fee, if the provider 

determines, based on income 

information the debtor submits to the 

provider, that the debtor is able to pay 

the fee in a reduced amount. Nothing in 

this subsection requires an provider to 

charge a fee to debtors whose household 

income exceeds the amount set forth in 

paragraph (b)(1)(i) of this section, or 

who are able to demonstrate ability to 

pay based on income as described in 

this subsection. 

(iii) A provider shall disclose its fee 

policy, including the criteria on which 


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16176 Federal Register / Vol. 78, No. 50 / Thursday, March 14, 2013 / Rules and Regulations 

it relies in determining a debtor’s 

eligibility for reduced fees, and the 

provider’s policy for collecting fees 

pursuant to paragraph (b)(1)(ii) of this 

section, in accordance with 

§ 58.33(k)(2). 

(2) The United States Trustee shall 

review the basis for the mandatory fee 

waiver policy set forth in paragraph 

(b)(1) of this section one year after the 

effective date of this part and then 

periodically, but not less frequently 

than every four years, to determine the 

impact of that fee waiver policy on 

debtors and providers. Any revisions to 

the mandatory fee waiver policy set 

forth in paragraph (b)(1) of this section 

shall be published in the Federal 

Register. 

(c) Notwithstanding the requirements 

of paragraph (b) of this section, a 

provider also may waive fees based 

upon other considerations, including, 

but not limited to: 

(1) The debtor’s net worth; 

(2) The percentage of the debtor’s 

income from government assistance 

programs; 

(3) Whether the debtor is receiving 

pro bono legal services in connection 

with a bankruptcy case; or 

(4) If the combined current monthly 

income, as defined in 11 U.S.C. 

101(10A), of the debtor and his or her 

spouse, when multiplied times twelve, 

is equal to or less than the amounts set 

forth in 11 U.S.C. 707(b)(7). 

(d) A provider shall not require a 

debtor to purchase an instructional 

course in connection with the purchase 

of any other service offered by the 

provider. 

(e) A provider who is also a chapter 

13 standing trustee may only provide 

the instructional course to debtors in 

cases in which the trustee is appointed 

to serve and may not charge any fee to 

those debtors for the instructional 

course. A standing chapter 13 trustee 

may not require debtors in cases 

administered by the trustee to obtain the 

instructional course from the trustee. 

Employees and affiliates of the standing 

trustee are also bound by the restrictions 

in this section. 

§ 58.35 Minimum requirements to become 

and remain approved providers relating to 

certificates. 

(a) An approved provider shall send 

a certificate only to the debtor who took 

and completed the instructional course, 

except that an approved provider shall 

instead send a certificate to the attorney 

of a debtor who took and completed an 

instructional course if the debtor 

specifically directs the provider to do 

so. In lieu of sending a certificate to the 

debtor or the debtor’s attorney, an 

approved provider may notify the 

appropriate bankruptcy court in 

accordance with the Federal Rules of 

Bankruptcy Procedure that a debtor has 

completed the instructional course. 

(b) An approved provider shall send 

a certificate to a debtor, or notify the 

appropriate bankruptcy court in 

accordance with the Federal Rules of 

Bankruptcy Procedure, that a debtor has 

completed the instructional course no 

later than three business days after the 

debtor completed an instructional 

course and after completion of a debtor 

course evaluation form that evaluates 

the effectiveness of the instructional 

course. The approved provider shall not 

withhold the issuance of a certificate or 

notice of course completion to the 

appropriate bankruptcy court because of 

a debtor’s failure to submit an 

evaluation form, though the provider 

should make reasonable effort to ensure 

that debtors complete and submit course 

evaluation forms. 

(c) If a debtor has completed 

instruction, a provider may not 

withhold certificate issuance or notice 

of course completion to the appropriate 

bankruptcy court for any reason, 

including, without limitation, a debtor’s 

failure to obtain a passing grade on a 

quiz, examination, or test. A provider 

may not consider instructional services 

incomplete based solely on the debtor’s 

failure to pay the fee. 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 

approved provider cannot deny a 

certificate to a debtor or notice of course 

completion to the appropriate 

bankruptcy court if the debtor has 

completed the course as designed. 

(d) An approved provider shall issue 

certificates only in the form approved 

by the United States Trustee, and shall 

generate the form using the Certificate 

Generating System maintained by the 

United States Trustee, except under 

exigent circumstances with notice to the 

United States Trustee. 

(e) An approved provider shall have 

sufficient computer capabilities to issue 

certificates from the United States 

Trustee’s Certificate Generating System. 

(f) An approved provider shall issue 

a certificate, or provide notice of course 

completion to the appropriate 

bankruptcy court in accordance with the 

Federal Rules of Bankruptcy Procedure, 

with respect to each debtor who 

completes an instructional course. 

Spouses receiving an instructional 

course jointly shall each receive a 

certificate or notice of course 

completion to the appropriate 

bankruptcy court shall be made for both 

individuals. 

(g) An approved provider shall issue 

a replacement certificate to a debtor 

who requests one. 

(h) Only an authorized officer, 

supervisor or employee of an approved 

provider shall issue a certificate, or 

provide notice of course completion to 

the appropriate bankruptcy court, and 

an approved provider shall not transfer 

or delegate authority to issue a 

certificate or provide notice of course 

completion to any other entity. 

(i) An approved provider shall 

implement internal controls sufficient to 

prevent unauthorized issuance of 

certificates. 

(j) An approved provider shall ensure 

the signature affixed to a certificate is 

that of an officer, supervisor or 

employee authorized to issue the 

certificate, in accordance with 

paragraph (h) of this section, which 

signature shall be either: 

(1) An original signature; or 

(2) In a format approved for electronic 

filing with the court (most typically in 

the form /s/ name of instructor). 

(k) An approved provider shall affix 

to the certificate the exact name under 

which the approved provider is 

incorporated or organized. 

(l) An approved provider shall 

identify on the certificate: 

(1) The specific federal judicial 

district requested by the debtor; 

(2) Whether an instructional course 

was provided in person, by telephone or 

via the Internet; 

(3) The date and time (including the 

time zone) when instructional services 

were completed by the debtor; and 

(4) The name of the instructor that 

provided the instructional course. 

(m) An approved provider shall affix 

the debtor’s full, accurate name to the 

certificate. If the instructional course is 

obtained by a debtor through a duly 

authorized representative, the certificate 

shall also set forth the name of the legal 

representative and legal capacity of that 

representative. 

§ 58.36 Procedures for obtaining final 

provider action on United States Trustees’ 

decisions to deny providers’ applications 

and to remove approved providers from the 

approved list. 

(a) The United States Trustee shall 

remove an approved provider from the 

approved list whenever an approved 

provider requests its removal in writing. 

(b) The United States Trustee may 

issue a decision to remove an approved 

provider from the approved list, and 

thereby terminate the approved 

provider’s authorization to provide an 

instructional course, at any time. 


wreier-aviles on DSK5TPTVN1PROD with RULES
Federal Register / Vol. 78, No. 50 / Thursday, March 14, 2013 / Rules and Regulations 16177 

(c) The United States Trustee may 

issue a decision to deny a provider’s 

application or to remove a provider 

from the approved list whenever the 

United States Trustee determines that 

the provider has failed to comply with 

the standards or requirements specified 

in 11 U.S.C. 111, this part, or the terms 

under which the United States Trustee 

designated it to act as an approved 

provider, including, but not limited to, 

finding any of the following: 

(1) If any entity has suspended or 

revoked the provider’s license to do 

business in any jurisdiction; or 

(2) Any United States district court 

has removed the provider under 11 

U.S.C. 111(e). 

(d) The United States Trustee shall 

provide to the provider in writing a 

notice of any decision either to: 

(1) Deny the provider’s application; or 

(2) Remove the provider from the 

approved list. 

(e) The notice shall state the reason(s) 

for the decision and shall reference any 

documents or communications relied 

upon in reaching the denial or removal 

decision. To the extent authorized by 

law, the United States Trustee shall 

provide to the provider copies of any 

such documents that were not supplied 

to the United States Trustee by the 

provider. The notice shall be sent to the 

provider by overnight courier, for 

delivery the next business day. 

(f) Except as provided in paragraph 

(h) of this section, the notice shall 

advise the provider that the denial or 

removal decision shall become final 

agency action, and unreviewable, unless 

the provider submits in writing a 

request for review by the Director no 

later than 21 calendar days from the 

date of the notice to the provider. 

(g) Except as provided in paragraph 

(h) of this section, the decision to deny 

a provider’s application or to remove a 

provider from the approved list shall 

take effect upon: 

(1) The expiration of the provider’s 

time to seek review from the Director, if 

the provider fails to timely seek review 

of a denial or removal decision; or 

(2) The issuance by the Director of a 

final decision, if the provider timely 

seeks such review. 

(h) The United States Trustee may 

provide that a decision to remove a 

provider from the approved list is 

effective immediately and deny the 

provider the right to provide an 

instructional course whenever the 

United States Trustee finds any of the 

factors set forth in paragraphs (c)(1) or 

(2) of this section. 

(i) A provider’s request for review 

shall be in writing and shall fully 

describe why the provider disagrees 

with the denial or removal decision, and 

shall be accompanied by all documents 

and materials the provider wants the 

Director to consider in reviewing the 

denial or removal decision. The 

provider shall send the original and one 

copy of the request for review, including 

all accompanying documents and 

materials, to the Office of the Director 

by overnight courier, for delivery the 

next business day. To be timely, a 

request for review shall be received at 

the Office of the Director no later than 

21 calendar days from the date of the 

notice to the provider. 

(j) The United States Trustee shall 

have 21 calendar days from the date of 

the provider’s request for review to 

submit to the Director a written 

response regarding the matters raised in 

the provider’s request for review. The 

United States Trustee shall provide a 

copy of this response to the provider by 

overnight courier, for delivery the next 

business day. 

(k) The Director may seek additional 

information from any party in the 

manner and to the extent the Director 

deems appropriate. 

(l) In reviewing the decision to deny 

a provider’s application or to remove a 

provider from the approved list, the 

Director shall determine: 

(1) Whether the denial or removal 

decision is supported by the record; and 

(2) Whether the denial or removal 

decision constitutes an appropriate 

exercise of discretion. 

(m) Except as provided in paragraph 

(n) of this section, the Director shall 

issue a final decision no later than 60 

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 

deadline. The Director’s final decision 

on the provider’s request for review 

shall constitute final agency action. 

(n) Whenever the United States 

Trustee provides under paragraph (h) of 

this section that a decision to remove a 

provider from the approved list is 

effective immediately, the Director shall 

issue a written decision no later than 15 

calendar days from the receipt of the 

provider’s request for review, unless the 

provider agrees to a longer period of 

time. The decision shall: 

(1) Be limited to deciding whether the 

determination that the removal decision 

should take effect immediately was 

supported by the record and an 

appropriate exercise of discretion; 

(2) Constitute final agency action only 

on the issue of whether the removal 

decision should take effect immediately; 

and 

(3) Not constitute final agency action 

on the ultimate issue of whether the 

provider should be removed from the 

approved list; after issuing the decision, 

the Director shall issue a final decision 

by the deadline set forth in paragraph 

(m) of this section. 

(o) In reaching a decision under 

paragraphs (m) or (n) of this section, the 

Director may specify a person to act as 

a reviewing official. 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, and 

such other duties as the Director shall 

prescribe in a particular case. 

(p) A provider that files a request for 

review shall bear its own costs and 

expenses, including counsel fees. 

(q) When a decision to remove a 

provider from the approved list takes 

effect, the provider shall: 

(1) Immediately cease providing an 

instructional course to debtors; 

(2) No later than three business days 

after the date of removal, send all 

certificates to all debtors who completed 

an instructional course prior to the 

provider’s removal from the approved 

list; and 

(3) No later than three business days 

after the date of removal, return all fees 

to debtors who had paid for an 

instructional course, but had not 

completely received the instructional 

course. 

(r) A provider must exhaust all 

administrative remedies before seeking 

redress in any court of competent 

jurisdiction. 

Dated: February 14, 2013. 

Clifford J. White III, 

Director, Executive Office for United States 

Trustees. 

[FR Doc. 2013–04364 Filed 3–13–13; 8:45 am] 

BILLING CODE 4410–40–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2013–0128] 

RIN 1625–AA00 

Safety Zone; M/V XIANG YUN KOU and 

MODU NOBLE DISCOVERER; 

Resurrection Bay, Seward, AK 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing a temporary safety zone in 

the navigable waters, from surface to 


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