Travel Loan CollectionsTravel Loan CollectionsChurch World Service IRP Church World Service IRP

ConferenceConference

20102010

What is a Travel Loan?What is a Travel Loan?

Why is it important?Why is it important?

IOM Travel LoansIOM Travel Loans

• Refugee Loan Fund (RLF)Refugee Loan Fund (RLF)– Funded by PRMFunded by PRM– Managed by IOMManaged by IOM– RLF used to fund refugee travelRLF used to fund refugee travel

$

RLF $

Refugee Loan FundRefugee Loan FundRevolving FundRevolving Fund

Interest-Free LoansInterest-Free Loans

75%

25%

LoansRLF

SUMMARYSUMMARY

• IOM manages Refugee Loan Fund (RLF) IOM manages Refugee Loan Fund (RLF) for PRMfor PRM

• Refugee travel to USA is funded - and Refugee travel to USA is funded - and loans issued - from the RLFloans issued - from the RLF

• Refugee payments go towardsRefugee payments go towards– Refugee travel (back to RLF) – Refugee travel (back to RLF) – 75%75%– Agency collection ops – Agency collection ops – 25%25%

Travel Loans a.k.a. Promissory Travel Loans a.k.a. Promissory Notes a.k.a. PromnotesNotes a.k.a. Promnotes

• IOM issues promissory notes with amounts IOM issues promissory notes with amounts based on average travel costsbased on average travel costs

• Loan is issued to the principal applicant for all Loan is issued to the principal applicant for all family members…family members…

• … … except refugees 18 years or older who sign except refugees 18 years or older who sign their own loans & unaccompanied minors their own loans & unaccompanied minors have loans signed by US anchorhave loans signed by US anchor

• Principal applicant signs the loan before Principal applicant signs the loan before departure and keeps a copydeparture and keeps a copy

• Loan is usually translated in the refugees’ Loan is usually translated in the refugees’ languagelanguage

• Loan specifies the terms of repaymentLoan specifies the terms of repayment

Terms of RepaymentTerms of Repayment

• Monthly installment loanMonthly installment loan• Total loan to be paid in 36 months Total loan to be paid in 36 months

from the start of the first billingfrom the start of the first billing• Monthly payment is the total loan Monthly payment is the total loan

amount equally divided over 36 amount equally divided over 36 monthsmonths

BillingBilling

• For CWS: one account opened for each For CWS: one account opened for each loan and account number is assigned.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

PaymentsPayments

• Monthly computerized statements sent 1Monthly computerized statements sent 1stst week of each month with envelope for week of each month with envelope for paymentpayment

• Payments to be sent to lock boxPayments to be sent to lock box• Payment must be received before the end Payment must be received before the end

of the month to avoid late paymentof the month to avoid late payment• Statements generated until loan fully paidStatements generated until loan fully paid

Special CircumstancesSpecial Circumstances

• DefermentsDeferments– HardshipHardship– Temporary medical Temporary medical

conditionsconditions– UnemploymentUnemployment

• Humanitarian Write-offsHumanitarian Write-offs– DisabilityDisability– DeathDeath– BankruptcyBankruptcy

Special CircumstancesSpecial Circumstances

• Splitting loans requiresSplitting loans requires– Agreement between the Agreement between the

parties to split the loan parties to split the loan amountamount

• Letter sent to new Letter sent to new borrower for new contractborrower for new contract

Credit Bureau ReportingCredit Bureau Reporting

• After 9-12 months, all accounts After 9-12 months, all accounts are reported monthly to the are reported monthly to the TransUnion Credit BureauTransUnion Credit Bureau

• Prompt/on-time monthly Prompt/on-time monthly payments helps to establish payments helps to establish goodgood credit rating credit rating

• Delinquent payments result in Delinquent payments result in poorpoor credit history affecting credit history affecting clientsclients

• Paid in full clients have loan Paid in full clients have loan status communicated to status communicated to TransUnionTransUnion

• Call CWS Travel Loan to avoid Call CWS Travel Loan to avoid credit problemscredit problems

Credit Dispute ProcessCredit Dispute Process• As data furnishers, our goal is to maintain complete and accurate information in 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 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 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 an item may be inaccurate, they may request an investigation of the data. Only inaccurate information may be removed; negative information that is accurate 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 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.years). Refugees should call CWS Travel Loan for more information.

Delinquent LoansDelinquent Loans

• After 42 months, if 30% is not After 42 months, if 30% is not paid, delinquent accounts are paid, delinquent accounts are transferred to IOM for collection transferred to IOM for collection (write-offs)(write-offs)

• Transferred loans no longer Transferred loans no longer interest freeinterest free

• Letters sent to delinquent Letters sent to delinquent clients at various times during clients at various times during the loan period prior to the loan period prior to handover to IOMhandover to IOM

What are possible effects of delinquency?What are possible effects of delinquency?On CLIENTS:On CLIENTS:oBad creditBad credit

oMore difficult to sustain the family More difficult to sustain the family needsneeds

oNo possibility to obtain other loansNo possibility to obtain other loans

oBad image in the communityBad image in the community

Responsibility under Cooperative Responsibility under Cooperative AgreementAgreement

• During the 90-day initial reception and During the 90-day initial reception and placement period, the Recipient shall provide placement period, the Recipient shall provide or ensure that the refugees assigned to it are or ensure that the refugees assigned to it are provided orientation, with appropriate language provided orientation, with appropriate language interpretation if necessary, concerning:interpretation if necessary, concerning:

• ……9. the legal requirement of each adult 9. the legal requirement of each adult refugee to fully repay his or her IOM refugee to fully repay his or her IOM transportation loan in accordance with the transportation loan in accordance with the established payment schedule.established payment schedule.

• (new) …7. personal and household budgeting (new) …7. personal and household budgeting and finance.and finance.

Responsibility under Responsibility under Cooperative AgreementCooperative Agreement

• Provide travel loan Provide travel loan orientationorientation– Loan … an Loan … an ObligationObligation– Where and how to send paymentsWhere and how to send payments– Why payment is importantWhy payment is important– Why having good credit is importantWhy having good credit is important– What happens when clients do not payWhat 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

• ALL Changes of Address ALL Changes of Address should be mailed , emailed should be mailed , emailed or faxed to CWS Travel or faxed to CWS Travel LoanLoan

Address ChangesAddress Changes

Who to Contact at CWS

CWSCWS

Travel LoanTravel Loan

475 Riverside Drive – Suite 700475 Riverside Drive – Suite 700

New York, NY 10115New York, NY 10115

– Keith Nichols 212-870-3361Keith Nichols 212-870-3361– Mary Hunt 212-870-2837Mary Hunt 212-870-2837– Gregoria Malaspina 212-870-2257Gregoria Malaspina 212-870-2257– CWS Travel Loan Dept 1-866-723-9579CWS Travel Loan Dept 1-866-723-9579

– Fax number -212-870-3220Fax number -212-870-3220

Who to contact at CWS

• knichols@churchworldservice.orgknichols@churchworldservice.org• gmalaspina@churchworldservice.orggmalaspina@churchworldservice.org• mhunt@churchworldservice.orgmhunt@churchworldservice.org

CWS Loan Payments to:

Church World ServiceChurch World Service

P.O. Box 64706P.O. Box 64706

Baltimore, MD 21264-4706Baltimore, MD 21264-4706

oror

Church World ServiceChurch World Service

Travel Loan Dept. – Suite 700Travel Loan Dept. – Suite 700

475 Riverside Drive475 Riverside Drive

New York, NY 10115New York, NY 10115

QuestionsQuestions

Thank YouThank You