§ 1261.11 Conflict-of-interests policy for Bank directors. ( a ) *Adoption of conflict-of-interests policy.* Each Bank shall adopt a written conflict-of-interests policy that applies to all members of its board of directors. At a minimum, the conflict-of-interests policy of each Bank shall: ( 1 ) Require the directors to administer the affairs of the Bank fairly and impartially and without discrimination in favor of or against any member;
( 2 ) Require independent directors to comply with § 1261.10(a);
( 3 ) Prohibit the use of a director's official position for personal gain;
( 4 ) Require directors to disclose actual or apparent conflicts of interests and establish procedures for addressing such conflicts;
( 5 ) Require the establishment of internal controls to ensure that conflict-of-interests reports are made and filed and that conflict-of-interests issues are disclosed and resolved; and
( 6 ) Establish procedures to monitor compliance with the conflict-of-interests policy.
( b ) *Disclosure and recusal.* A director shall disclose to the Bank's board of directors any financial interests he or she has, as well as any financial interests known to the director of any immediate family member or business associate of the director, in any matter to be considered by the Bank's board of directors and in any other business matter or proposed business matter involving the Bank and any other person or entity. A director shall disclose fully the nature of his or her interests in the matter and shall provide to the Bank's board of directors any information requested to aid in its consideration of the director's interest. A director shall refrain from considering or voting on any issue in which the director, any immediate family member, or any business associate has any financial interest.
( c ) *Confidential Information.* Directors shall not disclose or use confidential information they receive solely by reason of their position with the Bank to obtain any benefit for themselves or for any other individual or entity.
( d ) *Gifts.* No Bank director shall accept, and each Bank director shall discourage the director's immediate family members from accepting, any gift that the director believes or has reason to believe is given with the intent to influence the director's actions as a member of the Bank's board of directors, or where acceptance of such gift would have the appearance of intending to influence the director's actions as a member of the board. Any insubstantial gift would not be expected to trigger this prohibition.
( e ) *Compensation.* Directors shall not accept compensation for services performed for the Bank from any source other than the Bank for which the services are performed.
( f ) *Definitions.* For purposes of this section: ( 1 ) *Immediate family member* means parent, sibling, spouse, child, or dependent, or any relative sharing the same residence as the director.
( 2 ) *Financial interest* means a direct or indirect financial interest in any activity, transaction, property, or relationship that involves receiving or providing something of monetary value, and includes, but is not limited to any right, contractual or otherwise, to the payment of money, whether contingent or fixed. It does not include a deposit or savings account maintained with a member, nor does it include a loan or extension of credit obtained from a member in the normal course of business on terms that are available generally to the public.
( 3 ) *Business associate* means any individual or entity with whom a director has a business relationship, including, but not limited to: ( i ) Any corporation or organization of which the director is an officer or partner, or in which the director beneficially owns ten percent or more of any class of equity security, including subordinated debt;
( ii ) Any other partner, officer, or beneficial owner of ten percent or more of any class of equity security, including subordinated debt, of any such corporation or organization; and
( iii ) Any trust or other estate in which a director has a substantial beneficial interest or as to which the director serves as trustee or in a similar fiduciary capacity.
[73 FR 55715, Sept. 26, 2008, as amended at 74 FR 51463, Oct. 7, 2009]