NON-PROFIT TRANSPORTATION ASSOCIATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00498A000100140012-2
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 5
• Document Creation Date: December 9, 2016
• Document Release Date: October 25, 2000
• Sequence Number: 12
• Publication Date: July 22, 1976
• Content Type: MF

~~ USE ONLYi
Approved For Rele 011O'-/350 P79-00498A00
22 July 1976
STATINTL MEMORANDUM FOR:
Chairman, ADMAG
STATINTL FROM
Acting Executive Officer, DDA
SUBJECT Non-Profit Transportation Association
REFERENCE Memorandum from Chairman, ADMAG, dated
23 June 1976, to DDA, Subject: Non-Profit:
Transportation Association
1. Upon receipt of your recommendations, the DDA
forwarded them to the Director of Personnel.for his comments.
You will note from the reply that we have received that
there would appear to be significant administrative and
legal problems which preclude the implementation of your
suggestion.
2. Should you care to discuss this matter further,
please feel free to call me -- or , upon his STATINTL
return.
STATINTL
Attachment
Distribution:
Orig - Addressee w/att
1 - D/Pers
~1 - DDA Subject w/att
1 - DDA Chrono
1 - RFZ Chrono
Attachment: DDA 76-3588, Memo from D/Pers to DDA, Dated 20 July 76,
Subject: Non-Profit Transportation Association.
STATINTL Acting EO/DDA/_:lm (22 July 76)
Background: DDA 76-3153, Memo from Chairman, ADMAG to DDA,
Dated 23 June 76, Subject: Non-Profit Transportation Association.
Approved For Release 2001/03/30. .,CIA,,-.QPh79Q~,Q000100140012-2
 = Approved For Release 2ddf1b3710CIA-RDP797afl4~9,8A000100140
i ),l1 Registry
tU!_ 197?
MEMORANDUM FOR: Deputy Director for Administration
FROM F. W. M. Janney
Director of Personnel
SUBJECT . Non-Profit Transportation Association
REFERENCE Memo to DDA from Chairman, ADMAG
dtd 23 Jun 76, re same subject
1. Referent memorandum proposed two possible ways to
form a non-profit transportation association utilizing vans
driven by volunteer employees. The first involved purchase
of the vehicle by the driver through low interest-rate
Credit Union loans. The second envisioned the leasing
of vans by the newly formed association with the "backing"
of the Employee Activity Association. We assume "backing"
would mean that EAA would be financially responsible if
the transportation association were unable to fulfill the
terms of the lease. Listed below are pertinent comments
provided by the Credit Union and the Employee Activity
Association.
2. Credit Union:
a. The ADMAG proposes that the Credit Union offer
a preferential vehicle loan rate, under strict controls, to
members in order to encourage car pooling.
b. The Federal Credit Union Act and. the rules and
regulations place limitation on the amounts, maturities,
repayment terms and.security required for loans.. The Board
of Directors may establish more restrictive loan limitations
than those established by law and regulations; however, loans
made to members must be for provident and productive purposes
and must be approved. The role of the Credit Committee is
to provide loans that will be helpful to members. Within
the limitations prescribed by applicable law and regulations,
the Board can adjust from time to time the interest rates on
loans, the rate of interest refund, the maximum maturities,
and terms of payment or amortization of loans to members and
the maximum amount that may be loaned with and without security
to any member.
Approved For Release 2001/03/3 ? C~ .-RDP.79-00498A000100140012-2
JrTli.J.,!,
~`DMl'1~TSir
 Approved For Releas 1 O1Wm3/30` 'CtA=RTDP79-00498A000100140012-2
c. If the limits set meet the applicable law and
regulations, then it appears that the Board of Directors
could legally grant loans such as suggested in the ADMAG
memorandum; however, the Board must consider all the members
in making its policy decisions since any cost would be borne
by all. The Board should determine that the interest rate
conforms to the Credit Union's overall financial objectives
and that shareholders and borrowers are treated equally.
d. A precedent was set by the Board of Directors
on 28 June 1972 with the passing of Resolution 72-25. The
resolution established a special loan program at a preferred
rate of 4 percent for members who suffered losses of real or
personal property in the floods of June 1972.
e. The controls proposed by ADMAG would be hard to
monitor and time consuming. For instance, requirements would
include signed proof of daily and acceptable door-to-door
transportation from at least six employees and revalidation
of eligibility every three months. Also, non-compliance would
result in reversion to a higher interest rate. This could
require the full-time services of an individual. to check on
compliance and keep track of this particular kind of loan.
The responsibility to control the program is passed to the
Credit Union. What started out as a government-wide policy
and an Agency problem could become a Credit Union administra-
tion headache with the cost being absorbed by all members.
f. The ADMAG suggestion assumes that the "preferred"
interest rate will encourage people to apply for loans to
purchase cars for pooling. At the present time, the Credit
Union already has loans available to all members at a rate
which is very competitive and, in most instances, lower than
rates at banks. The difference in interest costs to the
member between the suggested "preferred" rate, matching the
current dividend level of 6.5 percent, and our regular auto
loan rate of 9 percent would be about $117 per year (on a
$7,000 van loaned for 48 months) or less than $10 per month.
This is not a significant difference and, in our opinion, not
enough of a difference to encourage people to comply with the
suggested controls. Also, the preferred rate matching the
current dividend level would mean that the Credit Union and all
of its members would have to assume any costs of administration
above and beyond the 6.5 percent return.
Approved For Release 2001/03/30 :2CIA-RDP79-00498A000100140012-2
T ~~ - zzrrr, T^'
 Approved For Releas ,200xt0$,130~yzCIA-RDP79-0d498A000100140012-2
3. Employee Activity Association:
a. The EAA is a non-profit organization with limited
financial resources. It has recently had considerable expense
related to the move and renovation of the EAA Store. There
has also been discussion in recent months of the possibility
that EAA will have to further absorb the salary expense of its
personnel and reimburse the Agency for space that it occupies.
With this impact on EAA's net worth, it is questionable whether
EAA has the financial capability to qualify as the "backer"
of van leases.
b. The Employee Activity Association's participation
in this venture could be questionable from another aspect, i.e.,
its charter. The charter provides for a broad range of endeavors.
It does, however, seem to direct that these activities be for
the welfare of its membership. This could possibly be overcome
by requiring all participants to be EAA members, but such an
action would tend to make the whole operation an EAA endeavor.
While the EAA staff could assist with initial organization,
polling of interest and publicity, it has neither the personnel
nor the facilities to take on the full-time administration of
an activity as complex as 'the non-profit transportation associ-
ation. Furthermore, it does not appear feasible to consider
staffing such an activity with volunteers as envisioned in
this proposal.
c. As a point of interest, the idea of van pooling
was submitted as an employee suggestion one year ago and was
declined. (A copy of Suggestion #76-16 is attached.)
4. We commend ADMAG for the creativity demonstrated in
their car pooling proposal, but we do not believe we can
concur, for the reasons specified above.
4' -i
1a` j P. Js. j. Se c~Gd
F. W. M. Janney
Attachment
Distribution:
Orig'- Adse
D/Pers
1 - DD/Pers/SP--BSD
1 - Staff Asst/NWFCU
1 - DD/Pers Chrono
DD/Pe~
OP/Crec~i~tP ni an
Retyped:OD/Pers
/30 : CIA-RDP79-D0498A000100140012-2 STATI NTL
3
 Approve
Approve
S ER WIL SIF TI AND BOTTOM
C I L "
OFFICIAL ROUTING SLIP
TO
NAME AND ADDRESS
DATE
INITIALS
I
Deputy Director for
mi.nis ra ion
2
7D 26, Headquarters
4
`
JU
5
6 C4
6
ACTION
DIRECT REPLY
PREPARE REPLY
APPROVAL
DISPATCH
RECOMMENDATION
COMMENT
FILE
RETURN
CONCURRENCE
INFORMATION
SIGNATURE
Remarks:
/4/u ~~ iSa1
7r It
FOLD F4 RE TO RETURN TO SENDER
FROM: NAME. ADDRESS AND PHONE NO.
A9E
.4
:
Director of Personnel
F
1 IA '
FORM NO. 237 Use previous editions
1-67 L I
140012-2
40012-2