Under the leadership of a new chief executive, the NationalFederation of Community Development Credit Unions has set itssights on helping the n early 700 credit unions that have acceptedthe NCUA's offer for a low-income designation take advantage oftheir new status.

“We expect to be able to explain to them both the value andopportunities found in working with lower income members and withthe low-income credit union designation,” said Cathie Mahon, theNational Federation's newly hired CEO.

Mahon takes the position of former federation CEO CliffordRosenthal who left in May to take a position with the ConsumerFinancial Protection Bureau.

Credit unions that are designated as low income have the abilityto accept nonmember deposits, offer secondary capital accounts,receive exceptions from the aggregate loan limit for memberbusiness loans and participate in the Community DevelopmentRevolving Loan Program.

Over 1,000 federally chartered credit unions, which the NCUAidentified as qualified for low-income designation based on theirmembership, were offered a streamlined path to the designation inAugust and efforts have commenced to offer the same procedure tostate-chartered credit unions that might qualify. Of that original1,000, over 623 accepted, according to the most recent agencynumbers released in September.

But the low-income designation does not bring experience workingwith lower income members or expertise in reaching out to thosemembers. Nor the techniques for discovering the opportunities thosemembers represent. The National Federation has experience in boththose areas, Mahon said.

“One of the things I have most admired about the federation isits ability to call out best practices from its members and fromcredit unions at large,” Mahon said, “and then help translate thosebest practices for other credit unions to use.”

The federation and Mahon also have experience working withcredit unions to solicit nonmember deposits and establishingsecondary capital accounts, which also might be unfamiliar tocredit unions which had not had those powers until recently.

Mahon, a former executive and board member at several differentcredit unions as well as former director of policy and programdevelopment for the National Federation, acknowledged that shestepped into a position that Rosenthal had made instrumental in thecredit union industry. But expressed confidence that she would helpthe National Federation continue to build on the progress it hadalready made.

“I think this is a very exciting time for the federation membersand for credit unions generally,” Mahon remarked. “The challengesare more intense but so are the opportunities.”

Mahon came to her new position most recently from a term as thedeputy commissioner for financial empowerment for New York City'sDepartment of Consumer affairs, a position that she said gave heran even stronger appreciation for the role credit unions can playin the lives of lower income people. While in the deputycommissioner position, Mahon helped the Office of FinancialEmpowerment, the first such effort in the country, to developprograms to help lower income New Yorkers build savings and improvetheir financial futures.

For example, under the Opportunity NYC program, lower incomepeople were able to open transaction accounts at 10 New Yorkfinancial institutions, five of them were credit unions. Theaccounts carried a $50 opening deposit as an incentive to openingthem, as well no fees or minimum balances. Other ideas for similaraccounts included special matching accounts that could becreated with all or part of the funds from the federal earnedincome tax credit, which members access through their federal taxreturns.

Mahon also has extensive experience in both the public andprivate grant-making world and served a key role with thefederation when the organization was helping to establish theCommunity Development Financial Institutions Fund at the U.S.Treasury Department.

This experience helped her more deeply appreciate the way lowerinterest government loans as well as corporate deposits can helpcredit unions ensure their financial stability so they can moreeffectively launch products and services which benefit lower incomemembers and help them succeed financially, she explained.