CRANSTON — Coastway Credit Union plans to convert to a mutually owned, state-chartered savings bank for one main reason: to be able to make more loans, said Bill White, Coastway’s president and chief executive officer.

Credit crunch? What credit crunch? “There is no credit crunch at Coastway,” White said in an interview Monday at the credit union’s headquarters in Cranston.

“We have money to lend [in home loans, car loans and other types of loans],” he said. “We’re just trying to continue lending it,” White said.

As a federally insured credit union, Coastway is limited as to the amount of certain loans it can make, White said.

“We have many types of loans, and we’ve reached some regulatory caps on some of them,” such as construction loans and small-business loans, he said.

By converting Coastway from a credit union into a mutually-owned thrift, Coastway would also be able to make additional loans beyond those caps, he said.

“Our members want access to loans of all types,” he said.

Over the years, Coastway has grown beyond its roots as a credit union founded in the early 1920s for telephone-company workers.

Besides its headquarters near the intersection of Reservoir and Park avenues in Cranston, it now has 7 branches, 115 employees, about 27,000 members, about $250 million in deposits and about $300 million in assets.

Coastway — which merged with Ocean State Community Credit Union of Warwick in 2000 — ranks as the fourth largest credit union in Rhode Island by asset size, White said.

During the last two or three years or so, Coastway’s board of directors has looked at the best options for continuing the credit union’s slow, steady growth, White said.

The board decided on a proposal to convert to a state-chartered, member-owned mutual savings bank. Members own the credit union now and would continue to own the institution — which would keep the Coastway name — after the conversion, White said.

So Coastway last week issued formal notice to its members advising them of its intent to convert.

The notice was posted at the credit union’s branches and was published in Saturday’s Providence Journal.

In the notice, Coastway said that converting would allow the institution “to offer loans to anyone, regardless of whether they have a deposit relationship with Coastway.”

Converting would also help increase business loans, the notice said. The boost in loans would result in higher revenues, “which would sustain our attractive rates and fees, help add additional branches, and expand the types of products and services we offer,” the notice said.

Coastway is in the process of obtaining input from its members about the plan. Based on that input, the credit union’s board will decide late next month whether to move forward with the conversion process.

If the board approves, Coastway would send a ballot to each member by year-end — and would also provide members with detailed information about the plan to help them decide, White said.

Coastway is regulated by the National Credit Union Administration and the state Department of Business Regulation.

If Coastway converts, it would be regulated by the Federal Deposit Insurance Corporation and the DBR.

Before the conversion could take place, Coastway would essentially need the approval of the NCUA, FDIC and DBR. (A state regulator said Monday that Coastway’s application would not be due until after it officially decides on converting.)

If members and regulators approve, Coastway’s conversion could take place some time in the first three months of next year, White said.

“Ultimately, the members will decide” whether the conversion will occur, he said.

As a credit union, Coastway does not pay federal or Rhode Island income tax on its profits. As a bank, it would.

Coastway’s overall tax burden would increase as a consequence of conversion, White acknowledged. However, he said, “If we’re moderately successful at achieving projected growth going forward,” the growth would “make up the [tax] difference easily,” he said.

By converting, Coastway expects that it would be able to increase the number of loans it makes, as well as its total work force and branch locations, White said.

He said he expects that Coastway would be able to operate in much the same fashion as Bank of Newport and Centreville Savings Bank, both of which have “managed to grow while still maintaining a strong flavor of community.”

The notice published last week also included the following items:

•Each member would continue to have one vote in Coastway’s affairs after conversion.

•Existing contractual interest rates on loans and deposits would remain the same.

•Coastway would continue to operate a surcharge-free automated teller machine (ATM) network.

•Deposits would continue to be federally insured.

•No Coastway director, officer or employee would receive any additional compensation as a result of the proposed conversion.

ndowning@projo.com