Robert H. McKinney, President Carter's controversial choice to head the Federal Home Loan Bank Board, yesterday said there is no conflict of interest in his position as chairman of a major savings and loan association and other business interests.

McKinney is a senior partner in the law firm that is counsel to the S&L, First Federal of Indianapolis and is chairman of jefferson Corp., a building supplies and adhesives company that has a life insurance subsidiary, Jefferson National.

McKinney a classmate of President Carter's at the Naval Academy as well his campaign chairman in Indiana, has also been accused of insensitivity to the mortgage needs of the inner city.

Sen. William Proxmire (D-Wis.), chairman of the Senate Banking Committee which opens hearings into the nomination Friday, also has expressed reservations about McKinney because of Proxmire's long-standing belief that regulators should not come from the industry they are supposed to oversee.

In an interview yesterday. McKinney said he has always been aware of "potential" conflicts of interest between some of his occupations and has gone out of his way to insure that he and other officers and directors of the companies he is affiliated with disclose all their interests and not participate in decisions in which they might have conflicting interests.

The Federal Home Loan Bank Board oversees most of the nation's $400-billion savings and loan industry, insures deposits up to $40,000 in most S&Ls, and also serves as a lender to S&Ls that are strapped for funds.

Congressional observers say the McKinney nomination will face tough going, both in the Senate Banking Committee and on the floor, but most expect that he will win approval.

The 51-year-old lawyer said it was the opposition to his nomination that in part convinced him to accept the President's offer. But, he said, "I told the President I wanted to be an effective chairman and not have to spend my time fighting various groups. I wanted him to think about that."

McKinney said the President replied in late May - a month before he formally sent McKinney's name to the Senate but long after it was known that McKinney was being considered - that. "You have the qualifications and I'm asking you to stay on and fight it out."

McKinney said that while his law firm - Bose, McKinney and Evans - serves as counsel to First Federal, he does not get involved in the legal work. "I was the attorney before I became chairman," he said, which is how he was considered for the job.

His partner, Lewis C. Bose, also is a member of the First Federal board of directors. He said Bose is the leading expert in Indiana on public law and is a valuable member of the board.

He said the S&Ls business accounts for less than 1 per cent of the law firm's income.

McKinney said it was possible that First Federal might have made loans to builders who bought some supplies from Jefferson Corp. "It could happen, he said, but there is "no way of knowing. There are no referrals."

"There are three very independent boards - First Federal, Jefferson National and Jefferson Corp." Jefferson Corp. owns nearly 23 per cent of the life insurance subsidiary.

"Members of the board are busy people, so there always is a potential for conflicts of interest. But there is a difference between potential conflicts and actual conflicts. Somehow I've got to be able to convince the (Senate Banking) committee of that."

he said all officers and directors have to "fill out complete disclosures so everyone knows . . . If I didn't allow busy leaders to be directors, who would I find that could do it."

McKinney said that the board has a "very delicate conscience on this question. Our minutes are replete with these kinds of discussions."

He said that "our institutions are run, in spite of appearances, on a cleaner basis than 99 per cent of all firms in the country."

McKinney said the biggest challenge facing the S&L industry is how to channel funds into the inner city. The S&L industry makes 80 per cent of all home mortgages, he said. Other lenders "are leaving that job."

He said that getting more loans into the inner city will not be accomplished by writing new regulations. "It will be done by jawboning, armtwisting and leadership." He said he resents charges that he and First Federal are insensitive to inner city needs.

"I don't claim First Federal is the greatest inner city lender, but it has made a serious effort to try to rehabilitate Indianapolis." He said that the head of the minority bank in Indianapolis, Dr. Frank Lloyd, will testify in support of his nomination.

McKinney said he agrees with Proxmire that government should be careful in regulators from the ranks of the industry they are supposed to oversee. McKinney said he does not consider himself a member of the S&L industry.