SUPPORTING STATEMENT:
APPLICATION FOR APPROVAL AS A PROVIDER OF A
PERSONAL FINANCIAL MANAGEMENT INSTRUCTIONAL COURSE
JUSTIFICATION
1. Necessity of Information Collection
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 enacted amendments to the Bankruptcy Code that took effect on October 17, 2005. Under the Bankruptcy Code, individual debtors are required to complete an approved instructional course concerning personal financial management after filing for bankruptcy before they may receive a discharge of their debts. 11 U.S.C. ' 727(a)(11). The United States Trustee Program (Program) has responsibility for approving the providers of the personal financial management instructional courses that debtors must complete. 11 U.S.C. ' 111(a)-(e). Before such a provider is approved, a United States Trustee (UST) is required to review the provider’s qualifications under the standards set forth in the statute, and the UST may require the provider to submit information needed for this review. 11 U.S.C. ' 111(d). Approved providers are named on a publicly available list in each federal judicial district where they are approved to educate debtors. 11 U.S.C. ' 111(a). The application enables the Program to solicit expressions of interest from providers wishing to participate and to collect the information needed to determine if the provider meets the statutory standards. 11 U.S.C. ' 111.
The application collects certain identifiable information (identifiers) of individuals related to the provider seeking approval of its application. These identifiers are as follows:
A. Principal contact for provider.
Name.
Street address.
Telephone number.
Email address.
Fax number.
Owner, officer, director, partner, or trustee of provider who served within the last three years.
Term of office.
Street address.
Principal occupation.
Employment experience.
Whether such individual has ever been convicted of a crime involving fraud, dishonesty, or false statements.
Provider (if an individual).
Name.
Street and mailing address.
Social Security number.
Telephone and fax numbers.
Internet website.
Email address.
Individual(s) who regularly refers debtors to provider.
Name.
Street and mailing address.
Telephone and fax numbers.
Email address.
Internet website.
Legal actions against provider.
All legal actions, proceedings, investigations, arbitrations, mediations, audits by federal or state agencies, and potential bond or other claims in which the provider is a party, pending or adjudicated, within the last three years, and the outcomes.
All prior or ongoing disciplinary or enforcement action by an applicable licensing, registration, or certification authority, court, or regulatory body against the provider, or any owner, officer, director, partner, trustee, employee, or agent of the provider, within last three years
Needs and Uses
The information collected through the application is necessary to carry out the Program’s statutory mandate. The collected information enables the Program to assess each applicant’s eligibility for approval under statutory standards that include providing trained personnel with adequate experience and training in providing effective instruction and services; using learning materials and teaching methodologies designed to assist debtors in understanding personal financial management; providing adequate facilities, and maintaining adequate records. Users of the data are:
Executive Office for United States Trustees (EOUST)
District and Regional Offices of Each United States Trustee
Each district or regional office receives only the information on the providers applying for approval within that particular district or region. The information is not shared with any other entity, unless allowed by law. If the Program receives a request for information under the Freedom of Information Act (FOIA), the Program complies with the FOIA and the Privacy Act in protecting private information not subject to disclosure under the FOIA. Providers may consent, if they so wish, to the sharing of their application information. The impact on personal privacy is minimal, as the application is generally not seeking sensitive information other than generic identifiers, such as names and addresses. The only sensitive information sought in the application is whether an owner, officer, director, partner, or trustee of the provider was ever convicted of a crime involving fraud, dishonesty, or false statements; whether the provider’s accreditation or certification was lost or suspended within the last five years; any legal action in which the provider has been a party with the last three years; and any disciplinary proceeding by an applicable licensing, registration, or certification authority, court, or regulatory body against the provider or any owner, officer, director, partner, trustee, employee, or agent of the provider within the last three years. Because providers may be placed in a position of public trust, the Program must ensure that such providers are trustworthy and capable of performing the duties assigned to them.
Use of Information Technology
The applicants may submit paper copies of all requested documents or they may submit an electronic application.
Efforts to Identify Duplication
The application significantly reduces duplication by allowing providers that wish to perform services in multiple jurisdictions to submit only one application for national review. The information in the application is not attainable from any other data source.
Minimizing Burden on Small Businesses
The Program seeks only necessary information in an effort to minimize the burden of preparing the application for small businesses.
Consequences of Not Conducting or Less Frequent Collection
This application is the only source of data on those applying to be approved as providers of a personal financial management instructional course. If the application is not approved, the Program will not be able to comply with Congress’ mandate to create and maintain an approved list of providers of personal financial management instructional courses. This data collection is conducted only upon initial application, six months after approval, and annually thereafter as mandated by statute, unless extenuating circumstances warrant otherwise.
Special Circumstances
This data will be collected in a manner consistent with the guidelines in 5 C.F.R. ' 1320.6.
Public Comments and Consultations
The Program has consulted with the Internal Revenue Service, the Federal Trade Commission, and a number of State Attorneys General. Public comment will be solicited during the 60‑day notice of application under review.
Provision of Payments or Gifts to Respondents
The Program will not provide any payment or gift of any type to applicants. Applicants participate on a voluntary basis.
Assurance of Confidentiality
The information gathered is used only by the EOUST and district or regional UST offices to evaluate qualifications. The information is secured in a system of records database at the EOUST. The information is shared outside of the EOUST only with district and regional offices as needed to make decisions regarding approval and with other agencies as allowed by law. If the Program receives a request for information under the Freedom of Information Act (FOIA), the Program complies with the FOIA and the Privacy Act in protecting private information not subject to disclosure under the FOIA. Providers may consent, if they so wish, to the sharing of their application information.
The information in the application is mandatory. In order for the Program to fulfill its statutory duty of approving only qualified providers, the Program must gather sufficient information to make an appropriate determination. It will be difficult for the Program to ensure that only qualified providers are approved if applicants are not obligated to divulge information about their owners, officers, directors, partners, and trustees, particularly if any have been convicted of crimes of fraud, dishonesty, or false statements.
Justification for Sensitive Questions
The application focuses on obtaining information necessary to make a determination regarding a provider’s qualifications to provide personal financial management instructional courses. The only information that is considered sensitive relates to whether an owner, officer, director, partner, or trustee who has served the agency within the last three years has ever been convicted of a crime involving fraud, dishonesty, or false statements (Items 2.5, 2.6, 2.7); whether the provider’s accreditation or certification was lost or suspended within the last five years (Item 2.11); any legal action in which the provider has been a party with the last three years (Item 2.13); and any disciplinary proceeding by an applicable licensing, registration, or certification authority, court, or regulatory body against the provider or any owner, officer, director, partner, trustee, employee, or agent of the provider within the last three years (Item 2.14). Applicant providers may be placed in a position of public trust, and the Program must ensure that such providers are trustworthy and capable of performing the duties assigned to them.
Estimate of Applicant=s Burden
In an effort to minimize the applicant’s burden, the application requires the minimum information needed for a review of qualifications. The number of applicants to date is approximately 275, and the Program believes this number will remain stable. The annual hour burden on applicants is estimated to be ten hours for initial applicants and four hours for applicants submitting a renewal application with no changes from the previous application. This estimate is based on consultations with individuals familiar with the financial education industry and on experience with applicants who have completed the application. The majority of applicants will utilize the renewal application.
The changes in the application reducing the hour burden include allowing electronic submission of applications and the use of a “no change” process that, rather than requiring an applicant to complete the entire application in full every year, permits the applicant to affirm that responses to certain items have not changed since the previous application. Because not all applicants will be able to utilize all of the streamlined features, it is difficult to estimate an annual hour burden for all applicants. Taking into consideration the many variables, the overall annual hour burden for each new applicant is estimated to be ten hours, and for each returning applicant four hours.
This overall annual hour burden estimate is based on the number of first-time applicants versus renewal applicants over the past several years. Although the Program cannot predict with certainty how many applicants will apply in the future, the number of renewal applicants has been relatively stable over the past three years, and the number of new applicants has not exceeded 10 percent of the total number of applications during that time. Accordingly, based on experience, the Program estimates that approximately 90 percent of applicants in any year will use the more streamlined renewal application while approximately 10 percent will complete the entire application for first-time applicants. The Program estimates the total annual hour burden of this information collection on applicants to be 1,268 hours using the following calculation:
The Program estimates there will be 275 annual applicants. Ten percent (or 28) will be initial applicants and 90 percent (or 247) will be renewal applicants. Twenty eight new applicants times 10 hours per submittal equals 280 hours. Two hundred forty seven renewal applicants times 4 hours per submittal equals 988. Two hundred eighty hours plus 988 hours equals 1,268 total burden hours. Below is a table showing the hour burden for the application and individual appendices for both initial applicants and returning applicants.
Please note that this information collection may also impose a burden on debtors who complete an instructional course because debtors are asked to voluntarily complete a satisfaction survey evaluating the effectiveness of the instructional course; the responses are used by applicants to complete Appendix E. Because the survey is minimal and asks only a few questions, the Program estimates that it should take approximately one minute for an average debtor to complete the survey. Based on 1,368,450 certificates issued in 2012 for completion of an instructional course, the Program estimates the aggregated annual hour burden on all debtors in connection with Appendix E to be 22,807.5 hours.
Initial Applicants Returning Applicants Debtors
Form |
Time (in hours) |
|
|
Application |
8.5 |
2 |
N/A |
Appendix A |
0 |
0 |
N/A |
Appendix B |
.5 |
.25 |
N/A |
Appendix C |
.5 |
.25 |
N/A |
Appendix D |
.5 |
.25 |
N/A |
Appendix E |
0 |
1.25 |
1 minute or .01 hours |
When the annual hour burden for applicants (1,268) is combined with the annual hour burden for debtors (22,807.5), the overall total annual hour burden associated with this information collection amounts to 24,075.50 hours.
13. Estimate of Cost Burden
The cost to applicants will be minimal. For applicants submitting applications electronically, the only anticipated costs, not including labor costs, are the costs of scanning paper documents and electronically submitting them. Such expenses are difficult to estimate due to variations among providers, but are not expected to exceed $50. To the extent applicants choose to submit paper applications rather than using the recommended electronic submission process, applicants may incur additional photocopying and postage expenses. Taking into consideration these variables, and the popularity of electronic submission, the total overall estimated cost for an application is $50. With approximately 275 applicants, the total annual cost burden is approximately $13,750.
14. Cost to Federal Government
The total annual cost to the federal government is estimated at $970,000, all of which will be incurred by the Program.1 The annual cost is based on 52 weeks of full‑time work by 6 professionals, including a supervisory attorney, bankruptcy analysts, and secretarial support.
The estimated cost to the federal government for this application is based on the following:
Information Technology Cost: $ 420,000
Salary: $ 550,000
Grand Total: $ 970,000
Reason for Change in Burden
The total annual hour burden for applicants was reduced from 3,000 annual hours to 1,268 annual hours because fewer applicants actually applied for approval than expected three years ago and the Program made changes to the application to enable applicants to complete and submit it more quickly. Previously, the Program estimated that 300 applicants would seek approval whereas the Program now estimates that 275 applicants will seek approval. In addition, the annual hour burden for applicants was further reduced because the Program implemented a change to its fillable application form that permits applicants to save changes to the forms from year to year, reducing the amount of time necessary to complete an application in future years. Also, returning applicants may affirm that responses to certain items have not changed since the previous application, rather than completing the entire application in full every year, and may submit the application electronically.
Previously, the burden on debtors in completing a satisfaction survey was not included when calculating the total annual hour burden associated with this information collection. To remedy this oversight, the Program has included the one-minute-per-survey burden estimate in the annual hour burden on debtors resulting in the significant increase of 22,807.5 hours associated with this information collection.
The total change in hours amounts to an increase of 21,075.5 hours. This change is based on the decreased burden of 1,732 hours on applicants, and the increased burden of 22,807.5 hours on debtors.
The total annual cost burden was reduced from $150,000 to $13,750 to reflect the reduced number of applicants, lower costs, and fewer hours needed to complete the application.
Anticipated Publication Plan and Schedule
The approved list of providers has already been published. This ICR is needed to enable the Program to continue to monitor providers’ compliance with statutory and regulatory requirements, and thereby, update the approved list as changes are needed.
Display of Expiration Date
The expiration date and OMB control number for the application will be shown on the form.
Exception to the Certification Statement
There are no exceptions identified in Item 19, “Certification for Paperwork Reduction Act Submission,” of OMB Form 83-I.
STATISTICAL METHODS
This section is not applicable to the application as Item 17 on Form OMB 83-I is checked “No.”
1 This total cost includes costs for the Program’s ICR 1105-0084, application for approval as a nonprofit budget and credit counseling agency, because the costs for both collections of information are indivisible.
| File Type | application/msword |
| Author | US Trustee Program |
| Last Modified By | Lynn Murray |
| File Modified | 2013-02-13 |
| File Created | 2013-02-13 |