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Implementation Plan <br /> As part of our implementation strategy to recommend policy and criteria by June 30, 1999, the <br /> following tasks will be presented and discussed for the Board's consideration to adopt as policy. <br /> 1. Propose instructions for handling loan collections, determining delinquent loans, and proposing <br /> methods for dealing with such loans. <br /> 2. Develop criteria for declaring bad debts and propose methods for dealing with bad debts. <br /> 3. Develop an Aging Report for CWCB Loans to evaluate the repayment record for CWCB loans <br /> and to classify the delinquent loans and bad debts. <br /> Loan Collection,Delinquent Loans and Methods of Collection <br /> The current written process instructions for loan collections contained in the Late Charge Policy <br /> adopted at the Board's July 1998 meeting, includes the following: <br /> 1. A reminder letter is sent to each borrower 30 days prior to the payment due date. The letter <br /> requests the borrower to contact CWCB if the borrower anticipates any problems with making <br /> the annual payment on time. <br /> 2. A loan is considered delinquent (late) if it is received 15 calendar days or more past the <br /> scheduled payment due date. (In the absence of a late charge provision in a contract, a loan is <br /> delinquent if the payment is not received on the day it is due.) <br /> • 3. Loan contracts entered into after March 1998 contain the late charge provision which assesses <br /> a charge of 5% on late payments. <br /> 4. If the borrower contacts the CWCB prior to the payment due date to discuss problems with <br /> making all or part of the loan payment on time,the staff would try to make alternate repayment <br /> plans to keep the borrower's payments on track, such as setting up a temporary monthly payment <br /> schedule that works around the borrower's income flow. <br /> Before the CWCB would reach the point of contractual remedies, we would consider a remedy <br /> provided for in §37-60-120 (3)that allows that "The board may adjust the authorized interest rate, <br /> extend the authorized repayment period for any project and defer one or more annual payments if, <br /> in the boards opinion, the entity requesting such adjustment, extension and deferment demonstrates <br /> that it has encountered significant and unexpected financial difficulties and that it has been duly <br /> diligent in its efforts to comply with the repayment provisions of its contract with the board." <br /> Bad Debts <br /> A delinquent loan would be classified as a bad debt when certain situations occurred and <br /> persisted. <br /> - The borrower falls behind in making payments. <br /> - The borrower can't get current on the payments. <br /> • - The borrower losses interest in trying to resolve the delinquency. <br /> - The borrower files for bankruptcy. <br /> 2 <br />