1105-0085 DE Supporting Statement (final rule)_080713

SUPPORTING STATEMENT:

APPLICATION FOR APPROVAL AS A PROVIDER OF A

PERSONAL FINANCIAL MANAGEMENT INSTRUCTIONAL COURSE

8080. 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:

42976. Name

42977. Title

42978. Mailing address

iv. Telephone and fax numbers

v. Email address

2. Officer, director, or trustee of provider who served within the last three years:

36128. Name

36129. Title

36130. Term in office

iv. Principal occupation

v. Amount of direct or indirect compensation

vi. Resume, if service is less than one year

vii. Reason for termination of service, if individual is no longer an officer, director or trustee

3. Independent contractor(s):

7696. Name

7697. Mailing address

7698. Telephone number

7699. Email address and Internet website

4. Individual(s) who regularly refers debtors to provider or receives referrals from provider:

28960. Name

28961. Mailing address

28962. Telephone number

28963. Email address and Internet website

5. Legal actions involving provider:

1. All legal actions, proceedings, investigations, arbitrations, mediations, and potential bond or other claims, whether pending or adjudicated in the last three years, in which the provider or any officer, director, trustee, employee, contractor, or agent of the provider is a party and the outcomes.

2. All prior or ongoing audit, disciplinary or enforcement actions by an applicable tax, oversight, licensing, registration, or certification body against the provider or any officer, director, trustee, employee, contractor, or agent of the provider, within the last three years and the outcomes.

2. 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.

3. Use of Information Technology

The applicants may submit paper copies of all requested documents or they may submit an electronic application.

3. 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.

3. 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.

3. 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.

3. Special Circumstances

This data will be collected in a manner consistent with the guidelines in 5 C.F.R. ' 1320.6.

3. 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.

3. 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.

3. 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 officers, directors, and trustees.

3. 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 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 includes the identification of: (1) instances where the provider’s accreditation or an instructor’s certification was lost or suspended within the last five years; (2) any legal action in which the provider or any officer, director, trustee, employee, contractor, or agent of the provider has been a party within the last three years; and (3) any disciplinary proceeding by an applicable licensing, registration, or certification authority against the provider or any officer, director, trustee, employee, contractor, 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.

3. 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 Program allows 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 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 24,075.5 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

15. Reason for Change in Burden

There is no change in burden from the most recent application that was approved by the Office of Management and Budget in February 2013.

15. 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.

15. Display of Expiration Date

The expiration date and OMB control number for the application will be shown on the form.

15. Exception to the Certification Statement

There are no exceptions identified in Item 19, “Certification for Paperwork Reduction Act Submission,” of OMB Form 83-I.

2. 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.

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