Coastway mulls change to bank status

CRANSTON – Coastway Credit Union is considering changing from a credit union to a Rhode Island-chartered mutual savings bank, officials said today. Under the proposal outlined in today’s announcement and a notice mailed to customers, the institution would remain member-owned.

“During our 88-year history, serving our members has always been the top priority,” Bill White, Coastway’s president and CEO, said in a statement today.

“This unanimous recommendation by our board reflects that commitment. We are confident that a charter change will have a positive impact on our members, along with the community as a whole.”

Coastway – founded in 1920 as the Telephone Workers’ Credit Union, in the Telephone Building on Washington Street in downtown Providence – describes itself as the fourth oldest continuously operating credit union in the United States.

It changed its name in 1989, to reflect its diverse and growing member base. In 2000, it merged with the former Warwick Credit Union, which by then was called Ocean State Community Credit Union, and the combined entity kept the Coastway name.

Today, Coastway has eight locations: its headquarters in Cranston; two branches in Providence; two in Warwick; and one each in Cranston, East Providence and Lincoln.

Now, White said, its directors believe that Coastway would experience further growth if it became a state-chartered, member-owned savings bank. “The board of directors believes that growth will enable Coastway to increase its lending capacity to businesses, as well as to individual members,” he added.

“We also believe that the conversion will allow Coastway to consider further expansion of the number of branch locations,” White said. “In our view, earnings from the enhanced lending ability will produce net earnings that Coastway will be able to reinvest in serving its members and the local community,” perhaps boosting its lending to small businesses, in which Coastway already is a leader.

As a bank, Coastway would become subject to taxes on earnings, he noted, but would no longer have to pay the Rhode Island credit-union tax.

The proposal will be put before members in a vote later this year, the credit union said.

“Regardless of the path we pursue,” White said, “nothing will alter our core, fundamental philosophy to provide the high level of service [that] all our members have come to expect and that we take pride in offering.”

Coastway Credit Union is a $300 million, 30,000-member financial institution with its headquarters in Cranston and seven branches across Rhode Island. For more information about Coastway, or its philanthropic Coastway Cares Charitable Foundation Inc., visit www.coastway.com.