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General Assembly Substitute Bill No. 7083
January Session, 2025
AN ACT CONCERNING VARIOUS REVISIONS TO THE CREDIT UNION
STATUTES RELATING TO NONMEMBER PAYMENTS, MEMBER
BUSINESS LOANS, CHARITABLE CONTRIBUTIONS, EXTENSIONS
OF CREDIT, CAPITAL AND NET WORTH.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 36a-435b of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective July 1, 2025): 2
As used in sections 36a-435a to 36a-472a, inclusive, unless the context 3
otherwise requires: 4
(1) "Appointed director" means a director emeritus or an advisory 5
director of a Connecticut credit union [,] who is not a member of the 6
governing board of such credit union; 7
(2) "Branch" means any office established by a Connecticut credit 8
union, an out-of-state, state-chartered credit union, a federal credit 9
union [,] or an out-of-state, federally-chartered credit union, as the case 10
may be, at a fixed location, at which shares or deposits are received, 11
share drafts or checks are paid [,] or money is lent, including an office 12
operated as a shared service center and not including the main office of 13
the credit union; 14
(3) "Capital" means undivided earnings, [regular reserves, other] 15 Substitute Bill No. 7083
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special purpose reserves, donated equity [,] and accumulated, 16
unrealized gains or losses on securities in accordance with generally 17
accepted accounting principles; 18
(4) "Certificate of incorporation" means the certificate of 19
incorporation of a Connecticut credit union and includes in the case of 20
Connecticut credit unions in existence on July 1, 1975, articles of 21
association, articles of incorporation and certificates of organization; 22
(5) "Corporate", when used in conjunction with any institution that is 23
a Connecticut credit union, federal credit union or out-of-state credit 24
union, means a corporate credit union, as defined in 12 CFR 704.2, as 25
from time to time amended; 26
(6) "Credit manager" means a natural person approved by the 27
governing board of a Connecticut credit union and employed by such 28
credit union to supervise its lending activities; 29
(7) "Credit union service organization services" means those services 30
that are authorized for credit union service organizations under state or 31
federal law, and that are closely related to credit union business, are 32
convenient and useful to credit union business, are reasonably related 33
to the operations of a credit union or are financial in nature; 34
(8) "Director" means a member of the governing board of a 35
Connecticut credit union; 36
(9) "Federal Credit Union Act" means 12 USC Section 1751 et seq., as 37
from time to time amended; 38
(10) "Financial institution" means any Connecticut credit union, bank, 39
federal credit union, out-of-state bank or out-of-state credit union; 40
(11) "Immediate family member" means [any person related by blood, 41
adoption or marriage to a person within the field of membership of the 42
Connecticut credit union] a (A) spouse, (B) natural or adoptive parent, 43
child or sibling, (C) stepparent, stepchild or stepsibling, (D) father-in-44
law, mother-in-law, daughter-in-law, son-in-law, brother-in-law or 45 Substitute Bill No. 7083
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sister-in-law, (E) grandparent or grandchild, or (F) spouse of a 46
grandparent or grandchild; 47
(12) "Insider" means a director, appointed director, member of a 48
board-appointed committee, member of senior management or loan 49
officer of a Connecticut credit union; 50
(13) "Loan officer" means a natural person who for compensation or 51
gain, or with the expectation of compensation or gain, accepts loan 52
applications or offers or negotiates the terms of personal, business or 53
other loan products. "Loan officer" does not include a natural person 54
engaged solely as a loan processor or underwriter; 55
[(12)] (14) "Member" means any person who has been admitted to 56
membership in the Connecticut credit union in accordance with this 57
chapter; 58
[(13)] (15) "Member in good standing" means a member who (A) 59
owns at least one membership share in a credit union, (B) is current on 60
all credit obligations to the credit union, and (C) has not caused the 61
credit union a credit or share loss that remains outstanding; 62
[(14)] (16) "Membership share" means a share equal to the stated par 63
value of the Connecticut credit union which may not be withdrawn or 64
transferred except upon termination of membership and which confers 65
membership and voting rights on the member; 66
[(15)] (17) "Mobile branch" means any office of a Connecticut credit 67
union at which credit union business is conducted, which is in fact 68
moved or transported to one or more predetermined locations in 69
accordance with a predetermined schedule; 70
[(16)] (18) "Multiple common bond membership" means a field of 71
membership consisting of more than one group of individuals, each of 72
which has, within the group, a common bond of occupation or 73
association; 74
[(17)] (19) "Officer" means the chairperson, vice chairperson, 75 Substitute Bill No. 7083
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secretary and treasurer of the governing board of a Connecticut credit 76
union; 77
[(18)] (20) "Senior management" means the president or chief 78
executive officer, vice president or vice chief executive officer, chief 79
financial officer, credit manager, and any person occupying a similar 80
status or performing a similar function; 81
[(19)] (21) "Share" means the basic unit of moneys held by a member 82
of a Connecticut credit union in share accounts at a Connecticut credit 83
union on which a dividend may be paid; 84
[(20)] (22) "Shared service center" means a branch that is (A) 85
established by any combination of two or more [(A)] (i) Connecticut 86
credit unions, [(B)] (ii) out-of-state, state-chartered credit unions, [(C)] 87
(iii) federal credit unions, or [(D)] (iv) out-of-state, federally-chartered 88
credit unions, [that is] and (B) operated in such a manner as to provide 89
a credit union member the same credit union services that the credit 90
union member could lawfully obtain at the main office of the 91
[member’s] member's credit union; and 92
[(21)] (23) "Single common bond membership" means a field of 93
membership consisting of one group that has a common bond of 94
occupation or association. 95
Sec. 2. Subsection (a) of section 36a-456b of the general statutes is 96
repealed and the following is substituted in lieu thereof (Effective July 1, 97
2025): 98
(a) As used in this section: 99
(1) "Tax and loan account" means an account, the balance of which is 100
subject to the right of immediate withdrawal, established for receipt of 101
payments of federal taxes and certain United States obligations. Such 102
accounts are not shares, as defined in [subdivision (17) of] section 36a-103
435b, as amended by this act; and 104
(2) "Note account" means a note, subject to the right of immediate call, 105 Substitute Bill No. 7083
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evidencing funds held by depositories electing the note option under 106
applicable United States Treasury Department regulations. Note 107
accounts are not shares, as defined in [subdivision (17) of] section 36a-108
435b, as amended by this act. 109
Sec. 3. Subsection (e) of section 36a-456a of the general statutes is 110
repealed and the following is substituted in lieu thereof (Effective July 1, 111
2025): 112
(e) (1) A Connecticut credit union may receive payments from a 113
nonmember who is [(1)] (A) an individual, into a share account held 114
jointly with a member of the Connecticut credit union, which share 115
account is subject to the provisions of section 36a-290; [(2)] (B) the 116
United States, this state or any municipality or other political 117
subdivision thereof; [(3)] (C) a federally-recognized Native American 118
tribal government located in this state; or [(4)] (D) another Connecticut 119
credit union, federal credit union or out-of-state credit union. 120
(2) Notwithstanding the provisions of subdivision (1) of this 121
subsection, a Connecticut credit union that is designated by the United 122
States Department of the Treasury as a community development 123
financial institution under 12 CFR Part 1805, as amended from time to 124
time, may receive payments from any nonmember, provided no such 125
payment shall exceed the lesser of one million five hundred thousand 126
dollars or twenty-five per cent of the total value of all shares of such 127
Connecticut credit union. 128
Sec. 4. Subparagraph (A) of subdivision (2) of section 36a-455a of the 129
general statutes is repealed and the following is substituted in lieu 130
thereof (Effective July 1, 2025): 131
(2) (A) Issue shares to its members and receive payments on shares 132
from its members and from [those] nonmembers [specified in] in 133
accordance with the provisions of subsection (e) of section 36a-456a, as 134
amended by this act, subject to the provisions of sections 36a-290 to 36a-135
297, inclusive, 36a-330 to 36a-338, inclusive, and 36a-456a, as amended 136
by this act, (B) receive deposits of members and nonmembers subject to 137 Substitute Bill No. 7083
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provisions of sections 36a-456a and 36a-456b, as amended by this act, 138
(C) reduce the amount of its member and nonmember shares and 139
deposits, (D) expel members and cancel shares in accordance with 140
section 36a-439a, and (E) provide check cashing and wire and electronic 141
transfer services to nonmembers who are within such credit union's 142
field of membership; 143
Sec. 5. Subdivision (3) of subsection (a) of section 36a-458a of the 144
general statutes is repealed and the following is substituted in lieu 145
thereof (Effective July 1, 2025): 146
(3) "Member business loan" means any loan, line of credit or 147
unfunded commitment thereof, letter of credit or any other extension of 148
credit, where the borrower intends to use or uses the proceeds for any 149
of the following purposes: (A) Commercial; (B) corporate; (C) 150
investment property; (D) business venture; or (E) agricultural, but does 151
not include the following loans: 152
(i) A loan intended for personal use; 153
[(i)] (ii) A loan fully secured by a lien on a one-to-four family 154
residence that is the primary residence of the member; 155
[(ii)] (iii) A loan fully secured by shares in the credit union making 156
the loan or by shares or deposits in other financial institutions; 157
[(iii)] (iv) One or more loans to a member or an associated member 158
where the proceeds are to be used or are used for the purposes specified 159
in this subdivision to benefit a common endeavor and which, in the 160
aggregate, are equal to less than fifty thousand dollars; 161
[(iv)] (v) A loan where any agency of the federal government, a state 162
or any political subdivision of such state, fully insures or guarantees 163
repayment, or provides an advance commitment to purchase the loan in 164
full; [or] 165
[(v)] (vi) A loan granted by the corporate Connecticut credit union to 166
a Connecticut credit union, federal credit union or out-of-state credit 167 Substitute Bill No. 7083
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union; or 168
(vii) A commercial loan to a nonmember or a participation interest in 169
a commercial loan to a nonmember that (I) is acquired by a federally 170
insured credit union in compliance with all applicable laws and 171
regulations, and (II) is not traded for a member business loan for the 172
purpose of circumventing the limitations on member business loans 173
established in subsections (f) to (i), inclusive, of this section. 174
Sec. 6. Subdivision (17) of section 36a-455a of the general statutes is 175
repealed and the following is substituted in lieu thereof (Effective July 1, 176
2025): 177
(17) (A) In the discretion of [a majority of its governing board] the 178
Connecticut credit union's senior management, make charitable 179
contributions or gifts, [to or for the use of any corporation, trust or 180
community chest, fund or foundation created or organized under the 181
laws of the United States or of this state and organized and operated 182
exclusively for charitable, educational or public welfare purposes, or of 183
any hospital which is located in this state and which is exempt from 184
federal income taxes and to which contributions are deductible under 185
Section 501(c) of the Internal Revenue Code of 1986, or any subsequent 186
corresponding internal revenue code of the United States, as from time 187
to time amended] provided (i) the aggregate amount of such charitable 188
contributions or gifts made during a fiscal year shall not exceed one ten-189
thousandth of the net assets of the Connecticut credit union as of the 190
close of the prior fiscal year, (ii) no such charitable contributions or gifts 191
are made to a recipient if an insider or immediate family member of an 192
insider is a director or member of senior management of such recipient, 193
and (iii) the Connecticut credit union establishes and maintains a record 194
of any charitable contribution or gift made pursuant to this 195
subparagraph; and 196
(B) (i) If approved by a majority of the Connecticut credit union's 197
governing board and documented in such governing board's minutes, 198
make charitable contributions or gifts (I) during a fiscal year that, in the 199 Substitute Bill No. 7083
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aggregate, exceed one ten-thousandth of the net assets of the 200
Connecticut credit union as of the close of the prior fiscal year, or (II) to 201
a recipient even if an insider or immediate family member of an insider 202
is a director or member of senior management of such recipient, and (ii) 203
provided the Connecticut credit union establishes and maintains a 204
record of any charitable contribution or gift made pursuant to this 205
subparagraph; 206
Sec. 7. Subsections (a) to (d), inclusive, of section 36a-454b of the 207
general statutes are repealed and the following is substituted in lieu 208
thereof (Effective July 1, 2025): 209
(a) The governing board of a Connecticut credit union shall adopt a 210
written conflict of interest policy that includes provisions addressing 211
transactions with insiders and their immediate family members [, as 212
defined in section 36a-435b,] and other persons having a common 213
ownership, investment or other pecuniary interest in a business 214
enterprise with such insiders and immediate family members of such 215
persons. [As used in this section, (1) "insider" means a director, 216
appointed director, member of a board-appointed committee, member 217
of senior management and loan officer of a Connecticut credit union, 218
and (2) "immediate family member" has the same meaning as 219
"immediate family member" as defined in section 36a-435b, provided 220
the term also includes any person related by blood, adoption or 221
marriage to an appointed director.] 222
(b) An extension of credit made by a Connecticut credit union to an 223
insider shall require the approval of the governing board if (1) such 224
insider is the debtor, guarantor, endorser or cosigner of the extension of 225
credit; and (2) the extension of credit by itself or when added to the 226
aggregate of all outstanding extensions of credit for which such insider 227
is the debtor, guarantor, endorser or cosigner exceeds twenty-five 228
thousand dollars plus pledged shares. 229
(c) No insider of a Connecticut credit union or professional retained 230
by a Connecticut credit union shall in any manner, directly or indirectly, 231 Substitute Bill No. 7083
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participate in any determination affecting such [person's] insider's or 232
professional's pecuniary interest or the pecuniary interest of any 233
immediate family member of such [person] insider or professional or 234
any corporation, partnership or association, other than the Connecticut 235
credit union, in which such [person] insider or professional is directly 236
or indirectly interested. 237
(d) [An] (1) Except as provided in subdivision (2) of this subsection, 238
an insider, immediate family member of such insider or other person 239
having a common ownership, investment or other pecuniary interest in 240
a business enterprise with an insider or immediate family member of 241
such insider shall not obtain an extension of credit from the Connecticut 242
credit union with preferential rates, terms or conditions, or act as 243
guarantor or endorser thereon, and shall not be involved in the 244
appraisal or valuation of assets which are to be used as collateral for an 245
extension of credit. 246
(2) An insider, an employee of a Connecticut credit union or a 247
member of the governing board may obtain an extension of credit from 248
the Connecticut credit union with preferential rates, terms or conditions, 249
or act as guarantor or endorser thereon, provided such extension of 250
credit is obtained pursuant to a written policy established by the 251
governing board. Any such written policy shall require that (A) uniform 252
preferential rates, terms or conditions are offered to insiders, employees 253
and members of the governing board, and (B) no extension of credit 254
shall be offered pursuant to such written policy if, at the time the credit 255
is extended, the Connecticut credit union reasonably expects such 256
extension of credit to result in a financial loss. 257
Sec. 8. Subsection (e) of section 36a-441a of the general statutes is 258
repealed and the following is substituted in lieu thereof (Effective July 1, 259
2025): 260
(e) As used in this section, the term "net worth" means the retained 261
earnings balance of the Connecticut credit union at the end of each 262
dividend period, excluding the allowance for loan and lease losses 263 Substitute Bill No. 7083
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account and, in the case of a Connecticut credit union designated by the 264
National Credit Union Administration as a low-income credit union 265
under 12 CFR 701.34, as from time to time amended, net worth includes 266
any secondary capital account that is uninsured and subordinate to all 267
other claims, including claims of creditors, shareholders and the 268
National Credit Union Share Insurance Fund. Retained earnings shall 269
consist of undivided earnings, as determined under generally accepted 270
accounting principles, [regular reserves] and other appropriations 271
designated by the commissioner or the National Credit Union 272
Administration, or its successor agency, or by the governing board of 273
the Connecticut credit union with the approval of the commissioner. 274
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2025 36a-435b
Sec. 2 July 1, 2025 36a-456b(a)
Sec. 3 July 1, 2025 36a-456a(e)
Sec. 4 July 1, 2025 36a-455a(2)(A)
Sec. 5 July 1, 2025 36a-458a(a)(3)
Sec. 6 July 1, 2025 36a-455a(17)
Sec. 7 July 1, 2025 36a-454b(a) to (d)
Sec. 8 July 1, 2025 36a-441a(e)
BA Joint Favorable Subst.