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Travel Loan Collections Church World Service IRP Conference 2010.

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Presentation on theme: "Travel Loan Collections Church World Service IRP Conference 2010."— Presentation transcript:

1 Travel Loan Collections Church World Service IRP Conference 2010

2 What is a Travel Loan? Why is it important?

3 IOM Travel Loans Refugee Loan Fund (RLF)Refugee Loan Fund (RLF) –Funded by PRM –Managed by IOM –RLF used to fund refugee travel $ RLF $

4 Refugee Loan Fund Revolving Fund Interest-Free Loans 75% 25% Loans RLF

5 SUMMARY IOM manages Refugee Loan Fund (RLF) for PRMIOM manages Refugee Loan Fund (RLF) for PRM Refugee travel to USA is funded - and loans issued - from the RLFRefugee travel to USA is funded - and loans issued - from the RLF Refugee payments go towardsRefugee payments go towards –Refugee travel (back to RLF) – 75% –Agency collection ops – 25%

6 Travel Loans a.k.a. Promissory Notes a.k.a. Promnotes IOM issues promissory notes with amounts based on average travel costsIOM issues promissory notes with amounts based on average travel costs Loan is issued to the principal applicant for all family members…Loan is issued to the principal applicant for all family members… … except refugees 18 years or older who sign their own loans & unaccompanied minors have loans signed by US anchor… except refugees 18 years or older who sign their own loans & unaccompanied minors have loans signed by US anchor Principal applicant signs the loan before departure and keeps a copyPrincipal applicant signs the loan before departure and keeps a copy Loan is usually translated in the refugees’ languageLoan is usually translated in the refugees’ language Loan specifies the terms of repaymentLoan specifies the terms of repayment

7 Terms of Repayment Monthly installment loanMonthly installment loan Total loan to be paid in 36 months from the start of the first billingTotal loan to be paid in 36 months from the start of the first billing Monthly payment is the total loan amount equally divided over 36 monthsMonthly payment is the total loan amount equally divided over 36 months

8 Billing For CWS: one account opened for each loan and account number is assigned.For CWS: one account opened for each loan and account number is assigned. First billing is sent 4 months after arrivalFirst billing is sent 4 months after arrival - Payment coupon & return envelope - Payment coupon & return envelope

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12 Payments Monthly computerized statements sent 1 st week of each month with envelope for paymentMonthly computerized statements sent 1 st week of each month with envelope for payment Payments to be sent to lock boxPayments to be sent to lock box Payment must be received before the end of the month to avoid late paymentPayment must be received before the end of the month to avoid late payment Statements generated until loan fully paidStatements generated until loan fully paid

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14 Special Circumstances DefermentsDeferments –Hardship –Temporary medical conditions –Unemployment Humanitarian Write-offsHumanitarian Write-offs –Disability –Death –Bankruptcy

15 Special Circumstances Splitting loans requiresSplitting loans requires –Agreement between the parties to split the loan amount Letter sent to new borrower for new contractLetter sent to new borrower for new contract

16 Credit Bureau Reporting After 9-12 months, all accounts are reported monthly to the TransUnion Credit BureauAfter 9-12 months, all accounts are reported monthly to the TransUnion Credit Bureau Prompt/on-time monthly payments helps to establish good credit ratingPrompt/on-time monthly payments helps to establish good credit rating Delinquent payments result in poor credit history affecting clientsDelinquent payments result in poor credit history affecting clients Paid in full clients have loan status communicated to TransUnionPaid in full clients have loan status communicated to TransUnion Call CWS Travel Loan to avoid credit problemsCall CWS Travel Loan to avoid credit problems

17 Credit Dispute Process As data furnishers, our goal is to maintain complete and accurate information in every client’s file that we transmit monthly to TransUnion for credit reporting purposes. If clients do not recognize information on their credit report, or believe an item may be inaccurate, they may request an investigation of the data. Only inaccurate information may be removed; negative information that is accurate will stay on their credit report as long as governing laws allow (currently up to 7 years). Refugees should call CWS Travel Loan for more information.As data furnishers, our goal is to maintain complete and accurate information in every client’s file that we transmit monthly to TransUnion for credit reporting purposes. If clients do not recognize information on their credit report, or believe an item may be inaccurate, they may request an investigation of the data. Only inaccurate information may be removed; negative information that is accurate will stay on their credit report as long as governing laws allow (currently up to 7 years). Refugees should call CWS Travel Loan for more information.

18 Delinquent Loans After 42 months, if 30% is not paid, delinquent accounts are transferred to IOM for collection (write-offs)After 42 months, if 30% is not paid, delinquent accounts are transferred to IOM for collection (write-offs) Transferred loans no longer interest freeTransferred loans no longer interest free Letters sent to delinquent clients at various times during the loan period prior to handover to IOMLetters sent to delinquent clients at various times during the loan period prior to handover to IOM

19 What are possible effects of delinquency? On CLIENTS: o Bad credit o More difficult to sustain the family needs o No possibility to obtain other loans o Bad image in the community

20 Responsibility under Cooperative Agreement During the 90-day initial reception and placement period, the Recipient shall provide or ensure that the refugees assigned to it are provided orientation, with appropriate language interpretation if necessary, concerning:During the 90-day initial reception and placement period, the Recipient shall provide or ensure that the refugees assigned to it are provided orientation, with appropriate language interpretation if necessary, concerning: …9. the legal requirement of each adult refugee to fully repay his or her IOM transportation loan in accordance with the established payment schedule.…9. the legal requirement of each adult refugee to fully repay his or her IOM transportation loan in accordance with the established payment schedule. (new) …7. personal and household budgeting and finance.(new) …7. personal and household budgeting and finance.

21 Responsibility under Cooperative Agreement Provide travel loan orientationProvide travel loan orientation –Loan … an Obligation –Where and how to send payments –Why payment is important –Why having good credit is important –What happens when clients do not pay Provide updated addressesProvide updated addresses Maintain loan and filesMaintain loan and files Review requests for deferments, hardship or write-offsReview requests for deferments, hardship or write-offs Provide SSNProvide SSN When in doubt…call the CWS Travel LoanWhen in doubt…call the CWS Travel Loan

22 ALL Changes of Address should be mailed, emailed or faxed to CWS Travel LoanALL Changes of Address should be mailed, emailed or faxed to CWS Travel Loan Address Changes

23 Who to Contact at CWS CWS Travel Loan 475 Riverside Drive – Suite 700 New York, NY 10115 –Keith Nichols 212-870-3361 –Mary Hunt 212-870-2837 –Gregoria Malaspina 212-870-2257 –CWS Travel Loan Dept 1-866-723-9579 –Fax number -212-870-3220

24 Who to contact at CWS knichols@churchworldservice.orgknichols@churchworldservice.orgknichols@churchworldservice.org gmalaspina@churchworldservice.orggmalaspina@churchworldservice.orggmalaspina@churchworldservice.org mhunt@churchworldservice.orgmhunt@churchworldservice.org

25 CWS Loan Payments to: Church World Service P.O. Box 64706 Baltimore, MD 21264-4706 or Church World Service Travel Loan Dept. – Suite 700 475 Riverside Drive New York, NY 10115

26 Questions

27 Thank You


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