Transforming the Lives of the Underserved
By Tahira Hayes, Credit Union Times
Cathie Mahon has always fought for the underdogs – those whose voices aren't always heard.
In 1989 she went to El Salvador with one of the first delegations of Americans that was able to go into the country following a state of siege. She spent weeks darting from prison to prison, waiting in lines in an attempt to track down political prisoners and people whose families she knew and had been working with in Los Angeles.
It was that tenacious spirit that landed her at the helm of the National Federation of Community Development Credit Unions, an organization dedicated to helping low- and moderate-income people and communities achieve financial independence through credit unions.
Before joining the Federation, she served as deputy commissioner at the New York City Department of Consumer Affairs, where she started and led New York City's Office of Financial Empowerment under the administration of Mayor Michael Bloomberg. The OFE became the first local government initiative in the nation specifically aimed at helping educate, empower and protect low-income residents, according to the Federation's website.
Mahon said she's always had a very strong desire to change the world. She had the benefit of a good education and access to resources, and she wanted to pay that forward.
“I do feel really fortunate that I’m in an office and organization that is all about figuring out new ways that we can be giving back, helping people do more with what they’ve got, and helping people feel supported and not alone,” the Women to Watch honoree said.
She's doing just that.
Mahon said the Federation has always seen itself as a trade organization as well as a catalyst for change.
“We see our role as trying to help our members develop new innovative products and services that will best help them help their members to move forward economically,” she said.
The Federation has been involved in a number of pilot products. Historically, its role in those products was always that of documenting best practices and putting reports together in an effort to replicate best practices, Mahon said. However, the Federation wanted to create its own product, and develop innovation and infrastructure that could be used across multiple organizations.
“Credit unions pay so much for technology that if we could think of ways to band together to create economies of scale, we could be doing more with less,” Mahon emphasized.
She and her team came up with the idea of creating a specialized, shared banking system that could specifically serve the needs of community development credit unions. By doing this, system enhancements, and innovative products and services could more quickly reach low-income communities to better serve the unique needs that low-income consumers may be presenting.
“We raised some money to do a feasibility study and spent a year and a half researching the marketplace and really learning a lot about the different kinds of systems that were out there. We also dug into what certain enhancements could best equip our members to be able to do more in their communities and their market,” Mahon said.
This year, the Federation finalized an agreement with EPL to build a core system called CU Impact. EPL, a CUSO, is focused on developing technology solutions and has a cooperative structure; its leaders were excited about the idea of collaborating with the Federation to build something unique for credit unions.
Thus far, eight to 10 credit unions have signed onto the new system and 20 more are looking into it.
For community development credit unions, it's important to track outcomes so they can identify what's working and what's not. Mahon said the Federation is working on building out system enhancements that will better analyze and track the types of impacts the platform is making on members and how they can use that information to create better pathways to innovation.
Two years ago, the Federation launched a product called Borrow and Save, which helps people get out of the cycle of payday lending. The program has flexible underwriting requirements and a required savings component, which allows people to save as they’re paying off debt. For example, if a person owes $100 to a payday lender, they can refinance a $200 loan with a credit union that participates in the program. Once the loan is repaid, the member will have access to $100 in a savings account.
The program strengthens members’ financial health while teaching them how to save. “Many people keep their savings and keep going with it,” Mahon said.
At the end of the day, Mahon said she believes what people value the most is a trusted relationship. The Federation has been trying to figure out how to get some of the busy work off the plates of credit unions so they can focus on investing and building those trusted relationships.
“We always keep in mind the ultimate consumer as the number one priority and end goal,” she said. “We think credit unions are the absolute best vehicle for helping low-income people to empower themselves and to build and rebuild their financial lives.”