[RNS] US faith-based groups earn millions on refugee loan commissions

Faith-based agencies that resettle refugees in America stand to gain more than a clear conscience if the United States ”” after what is expected to be a fierce debate in Congress ”” accepts a proposed 10,000 Syrian refugees next year.

More refugees also means more revenue for the agencies’ little-known debt collection operations, which bring in upwards of $5 million a year in commissions as resettled refugees repay loans for their travel costs. All nine resettlement agencies charge the same going rate as private-sector debt collectors: 25 percent of all they recoup for the government.

This debt collection practice is coming under increased scrutiny as agencies occupy a growing stage in the public square, where they argue America has a moral obligation to resettle thousands of at-risk Syrian refugees. Some observers say the call to moral action rings hollow when these agencies stand to benefit financially.
In some cases, collections subsidize a church’s various departments and programs. In the Episcopal Church, collections from refugees account for 1.7 percent of budgeted nongovernmental revenues, or $721,000 a year on average. From 2013 through 2015, the haul from refugees was $400,000 higher than expected and helped create a projected $3 million surplus for the church, according to Episcopal Church Treasurer and Chief Financial Officer Kurt Barnes.

At an Episcopal Church board of directors meeting in November, Barnes summed up the process and rationale. He said three staffers at Episcopal Migration Ministries work the phones to collect debt payments from refugees. Their work not only generates funds for the church, he said, but it also helps refugees.

“Some people say, ”˜Oh, you’re in the collections business,’” Barnes said. “Yes, but we also prefer to say that we are in the business of providing credit history for new citizens or future citizens.”

Some ethicists say that while agencies and their denominations still have an important moral perspective ”” even with their 25 percent commissions ”” they need to be more open about where their money comes from and where it goes.

“You could help refugees build up a credit history, but only take 5 percent off the top as a fee for your collecting the loan,” said Wally Siewert, director of the Center for Ethics in Public Life at the University of Missouri-St. Louis.

“What they have to be able to justify is that 25 percent rate. They have to be honest and say: ”˜This is what these services have been shown to be worth on the open market, (and) we are using the revenue that they are generating in order to provide all of our services.’ They have to be open about that.”

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Posted in * Anglican - Episcopal, Episcopal Church (TEC)

One comment on “[RNS] US faith-based groups earn millions on refugee loan commissions

  1. Steven says:

    Okay, let’s see if I understand. The United States lends to — exactly [i]whom[/i] the article does not say, but since the refugee is “expected” to repay the loan… — refugees funds, interest-free, for them to come to the US. This is a good thing our nation does, offering a helping hand to refugees in their need.

    The “expectation” is somewhat weak as only 61% of the recipients actually make payments toward this loan. Which is even more of a generous helping hand to refugees in their continuing need.

    Those who do repay this loan, pay (it appears) through the agency the agency that assists their resettlement. And of that repayment, the United States receives 75%, with the agency keeping the remainder as a “collection fee.”

    The math here tells me the United States (borrowing money from the Chinese to run day-to-day operations) receives about 46% of what it generously loaned interest-free. And my church’s refugee agency (if its experience is like the Catholics’) is getting about 15% of what the United States lent to refugees is also paid them to re-settle.

    And, as one who thinks my country should be open to as many refugees as possible, I’m suddenly left wondering if LIRS’ hands are as clean as I’ve always thought they were.