(a) The governing board of a Connecticut credit union shall adopt a written conflict of interest policy that includes provisions addressing transactions with insiders and their immediate family members, as defined in § 36a-435b, and other persons having a common ownership, investment or other pecuniary interest in a business enterprise with such insiders and immediate family members of such persons. As used in this section, (1) “insider” means a director, appointed director, member of a board-appointed committee, member of senior management and loan officer of a Connecticut credit union, and (2) “immediate family member” has the same meaning as “immediate family member” as defined in § 36a-435b, provided the term also includes any person related by blood, adoption or marriage to an appointed director.

(b) An extension of credit made by a Connecticut credit union to an insider shall require the approval of the governing board if (1) such insider is the debtor, guarantor, endorser or cosigner of the extension of credit; and (2) the extension of credit by itself or when added to the aggregate of all outstanding extensions of credit for which such insider is the debtor, guarantor, endorser or cosigner exceeds twenty-five thousand dollars plus pledged shares.

(c) No insider of a Connecticut credit union or professional retained by a Connecticut credit union shall in any manner, directly or indirectly, participate in any determination affecting such person’s pecuniary interest or the pecuniary interest of any immediate family member of such person or any corporation, partnership or association, other than the Connecticut credit union, in which such person is directly or indirectly interested.

(d) An insider, immediate family member of such insider or other person having a common ownership, investment or other pecuniary interest in a business enterprise with an insider or immediate family member of such insider shall not obtain an extension of credit from the Connecticut credit union with preferential rates, terms or conditions, or act as guarantor or endorser thereon, and shall not be involved in the appraisal or valuation of assets which are to be used as collateral for an extension of credit.

(e) An insider and the immediate family member of such insider shall not receive, directly or indirectly, any commission, fee or other compensation, except those of a nominal value, in connection with any extension of credit by the Connecticut credit union, provided this subsection shall not prohibit: (1) Payment by a Connecticut credit union of: (A) Salaries to employees, (B) incentives or bonuses to employees based on the Connecticut credit union’s overall financial performance, (C) incentives or bonuses to employees, other than a member of senior management, in connection with an extension of credit, provided the governing board establishes written policies and internal controls in connection with such incentives or bonuses and monitors compliance with such policies and controls at least annually, (D) fees to an insider or immediate family member of such insider for the performance of title searches, loan closings and collections, provided the Connecticut credit union has complied with subsection (k) of this section prior to engaging such insider or immediate family member of such insider; and (2) receipt of compensation from a person outside a Connecticut credit union by a director, appointed director, member of a board-appointed committee or employee who is not a member of senior management or an immediate family member of such director, appointed director, committee member or employee, for a service or activity performed by the director, appointed director, committee member or employee outside the Connecticut credit union, provided no referral has been made by the credit union or the director, appointed director, committee member, employee or immediate family member of such director, appointed director, committee member or employee.

(f) An insider and the immediate family members of such insider or an employee of a Connecticut credit union shall not receive anything of value in connection with the making of an investment or deposit by the Connecticut credit union of funds of the credit union, unless the governing board determines that the involvement of the insider, the immediate family member of such insider or the employee does not present a conflict of interest, and includes such determination in its minutes. The prohibition contained in this subsection shall not prohibit the credit union from paying salaries, incentives and bonuses to employees in connection with the making of such investments or deposits. An insider shall conduct all transactions that are not prohibited under this subsection at arm’s length and in the best interests of the Connecticut credit union.

(g) An insider and the immediate family members of such insider shall not receive any direct or indirect compensation or benefit in connection with the credit union’s insurance or group purchasing activities for members and employees. The prohibition contained in this subsection shall also apply to any employee not otherwise covered if the employee is directly involved in insurance or group purchasing activities unless the governing board determines that the employee’s involvement does not present a conflict of interest and includes such determinations in its minutes. An insider and the immediate family member of such insider shall conduct all transactions that are not prohibited under this subsection at arm’s length and in the best interests of the credit union.

(h) A Connecticut credit union shall not buy, lease or otherwise acquire premises from any of the following without the prior approval of the governing board, such approval to be included in the governing board’s minutes: (1) An insider or immediate family member of such insider; (2) a corporation in which an insider or immediate family member of such insider is an officer or director or has an ownership interest of ten per cent or more; (3) a partnership in which any insider or immediate family member of such insider is a general partner or a limited partner with an interest of ten per cent or more. The prohibition contained in this subsection shall also apply to any employee not otherwise covered if the employee is directly involved in investments in fixed assets unless the governing board determines that the employee’s involvement does not present a conflict of interest and includes such determinations in its minutes.

(i) No insider or employee of a Connecticut credit union or the immediate family member of any such person shall purchase, directly or indirectly, any of the assets of the credit union for an amount less than the current market value thereof, without the prior approval of the governing board which approval shall include a determination that the transaction is in the best interests of the credit union. Such approval and determination shall be included in the governing board’s minutes.

(j) With the approval of the commissioner, a Connecticut credit union may have as an employee, director or appointed director a person who serves as an officer, employee, director or appointed director of any other financial institution.

(k) When a Connecticut credit union retains an insider or an immediate family member of such insider to render services to the credit union, the governing board shall document in its minutes that such hiring was at arm’s length and in the best interests of the credit union and was in accordance with the competitive bidding and appropriate due diligence process as provided in the credit union’s conflict of interest policy.

(l) The directors, appointed directors, members of board-appointed committees, members of senior management and the immediate family members of such persons that have outstanding loans or investments in a credit union service organization shall not receive any salary, commission, investment income or other income or compensation from such credit union service organization, either directly or indirectly, or from any person being served through the credit union service organization. This provision shall not prohibit (1) such Connecticut credit union insiders or the immediate family members of such persons from assisting in the operation of such credit union service organization, provided such persons are not compensated by the credit union service organization, and (2) reimbursement to the Connecticut credit union for the services provided by such directors, appointed directors, committee members or senior management members if the accounts receivable of the Connecticut credit union due from the credit union service organization are paid in full at least quarterly.

(m) A Connecticut credit union shall not grant a member business loan if any additional income received by the credit union or senior management of the credit union is tied to the profit or sale of the business or commercial endeavor for which the loan is made.