11 U.S.C. § 111 — Nonprofit budget and credit counseling agencies; financial management instructional courses

(a) The court clerk must keep a public list of: (1) nonprofit budget and credit counseling agencies approved by the U.S. trustee (or bankruptcy administrator) that provide the counseling services described in section 109(h); and (2) instructional courses on personal financial management that are similarly approved. (b) How the U.S. trustee approves an agency or course: (1) the trustee must thoroughly review the agency's or course provider's qualifications and the services offered, and can ask for supporting information; (2) the trustee must find that the agency or course fully meets the standards in this section; (3) if the agency or course wasn't already on the approved list, approval starts with a probationary period of up to 6 months; (4) after probation, the trustee can approve the agency or course for a full year at a time, renewable each year, if it has shown it meets the standards and can keep meeting them; (5) within 30 days of a final decision under (4), anyone interested can ask a federal district court to review that decision. (c) Standards for counseling agencies: (1) the trustee can only approve an agency that will provide qualified counselors, safely handle and pay out client funds, give solid credit counseling, and otherwise run its services responsibly; (2) at minimum, the agency must — (A) have a board of directors mostly made up of people who don't work for the agency and don't personally profit from its counseling outcomes; (B) if it charges a counseling fee, charge a reasonable one and still serve people who can't pay; (C) safely handle client funds, including yearly audits of trust accounts and bonding its employees; (D) fully disclose things like funding sources, counselor qualifications, possible credit-report effects, and any costs to the client; (E) give real counseling that looks at the client's finances, what caused their problems, and a plan to fix them without growing their debt; (F) use trained counselors who aren't paid commissions or bonuses tied to counseling outcomes; (G) show real experience and background in credit counseling; and (H) have enough money to keep supporting clients' budgeting plans for as long as their repayment plans last. (d) Standards for instructional courses: (1) for an initial probationary approval, the course must have — (A) trained staff with real experience teaching it; (B) materials and teaching methods that actually help people understand personal finances and meet the course's stated goals; (C) reasonably convenient facilities, though phone or internet delivery counts too if effective; (D) records (including the debtor's case number) that let regulators check whether the course is working, available to the Executive Office for U.S. Trustees, the U.S. trustee (or administrator), and the local chief bankruptcy judge; and (E) if it charges a fee, a reasonable one, without excluding people who can't pay; (2) for each following year of approval, the provider must show the course still meets those standards, and that it has actually helped a substantial number of debtors understand personal finance and is likely to keep doing so. (e) The district court may investigate a listed counseling agency at any time and demand documents to check its integrity. The court can also remove an agency from the approved list if it no longer meets the standards in (b). (f) When the U.S. trustee (or administrator) decides an agency or course is no longer approved, it must tell the clerk, who removes it from the list. (g)(1) A counseling agency cannot report to credit reporting agencies whether a debtor received or sought its counseling. (2) An agency that willfully or carelessly breaks any rule under this title, hurting a debtor, owes that debtor damages equal to their actual losses plus reasonable court costs and attorney's fees the court awards, for an action to recover those damages.