CRANSTON, R.I. (5/4/09)--Members of a Cranston, R.I.-based credit union approved its plan to convert from a credit union charter to a mutual savings bank at a membership meeting Wednesday night.
Nearly 80% of members who voted approved the conversion of Coastway CU (Providence Journal May 1). The $300 million has 30,000 members. About 6,000 members voted.
The next step is to submit the election results to the National Credit Union Administration and the state Division of Banking. If approved, the conversion could come as early as three to four months, said the credit union. It will change its name to Coastway Community Bank.
The credit union said it is up against its business lending cap and will be able to expand business lending as a bank.
Analysts have estimated that as many as 25 credit unions may be considering charter changes (US Banker May 1). That compares with eight credit unions that switched charters in the past five years. They attribute the increase to the mortgage market meltdown and the impact on the bottom line of recapitalizing corporate credit unions.
Of the 34 credit unions that have converted since 1995, 27 have either gone public or merged with other banks. (CU Times)