CUNA Regulatory Comment Call

July 27, 2006

Application and Criteria to Serve as Financial Counselors and Instructors under the New Bankruptcy Law


Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at and to Senior Assistant General Counsel Jeff Bloch at; or mail them to Mary and Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6032, if you have questions or would like a copy of the interim final rule. You may also access a copy of the rule at the following address:


Under the new bankruptcy law that was passed last year, individual debtors are now required to consult with approved Agencies for purposes of receiving credit counseling within 180 days before filing for bankruptcy. Debtors are also required to participate in a personal financial management instructional course with an approved Provider before being granted a discharge of their debts.

The Trustees Office is responsible for approving the Agencies and the Providers, based on their qualifications and the services that they will provide. Those seeking approval as Agencies and Providers must file an application, which is available on the Trustees Office website at


Based on previous conversations between CUNA and the Trustees Office, it appears that credit unions may only be approved as an Agency for purposes of providing counseling to debtors who have debts with entities other than the credit union who is acting as the Agency. This restriction does not affect financial counseling that credit unions currently provide. The only impact would be that such services could not be used to comply with the requirement under the new bankruptcy law that the debtor receive counseling from an Agency before receiving a discharge of the debts.

There is no such restriction for credit unions who want to become an approved Provider. Under the interim final rule, before being approved by the Trustees Office, a Provider must:

To be considered for approval, the Provider must compete and submit the “Application for Approval as a Provider of a Personal Financial Management Instructional Course.” The Provider must submit a new application 45 to 60 days before the expiration of the initial sixth month probationary period and the expiration of each annual period before being approved for an additional annual period. The Provider is responsible for updating and amending the information on the application.

The Provider will be notified if the initial application is denied, along with the reasons for the denial, and will also be notified in the future if it is being removed from the approved list. The Provider will then have twenty days to request a review of this decision by the Director of the Trustees Office, which must include the reasons for disagreeing with the denial or removal from the list, along with any supporting documentation. The Director may request any additional information and must then issue a decision within 45 days after receiving the request for review, unless this time period is extended. The Director has the option to delegate this review function to a reviewing official.


  1. Should CUNA advocate that credit unions be permitted to be approved as an Agency for purposes of providing counseling to debtors within 180 days of filing for bankruptcy, even if they do have debts with the credit union who is acting as the Agency? The Trustees Office believes there would be a conflict of interest in this situation in that credit unions could use this opportunity to push for reaffirmation of their debts. Do you believe this is a valid concern?

  2. Do you believe that many credit unions will qualify or seek to qualify as Providers? The criteria for Agencies is similar. Do you believe that many credit unions will qualify or seek to qualify as Agencies if the Trustees Office were to permit a credit union to act as an Agency to debtors who have debts with that credit union?

  3. Other comments?

Eric Richard • General Counsel • (202) 508-6742 •
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 •
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 •
Lilly Thomas • Assistant General Counsel • (202) 508-6733 •
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 •