HLB Bulletin No. 007

May 24, 2011

RE: Member Products Guide and Correspondent Services Manual

The Federal Home Loan Bank of New York (“HLB”) has updated its Member Products Guide (the “Guide”) and it’s Correspondent Services Manual (the “Manual”).  The guide contains HLB’s 2011 Fee Schedule effective January 1, 2011.

The Guide details the HLB’s credit and collateral standards and can assist you in finding helpful information on matters such as the requirements for advance borrowings, eligible collateral types, and service fee schedules.

The Manual describes the HLB’s correspondent services and associated program guidelines and it provides helpful information on our 1Link e-commerce platform, Funds Transfer and Securities Safekeeping services, Overnight Investment Accounts, and service fee schedules.

Both the Manual and the Guide can be found by signing on to 1Link, our internet banking system and clicking on the ‘Manuals and Guides’ tab. These documents are updated as needed throughout the year. The newly published versions of the Guide and the Manual reflect any changes to HLB products and services.

Below are brief descriptions of the more substantive changes to the Member Services Guide:

Prepayment of Advances (pgs 16-29):

  • The 10% prepayment fee associated with puttable advances transacted prior to January 01, 2007 has been eliminated. The post-Jan2007 prepayment methodology will be now utilized, bringing all puttables under the same treatment. As before, all puttable advances are subject to prepayment fees based upon a valuation in which the HLB is financially indifferent to advance prepayment. That is, the HLB is “made-whole” with respect to foregone earnings due to the prepayment of an advance.
  •  The ARC advance prepayment now separates the current period (which has a fixed rate) from later floating reset periods. The prepayment amount will be calculated to be the sum prepayment calculations for the two parts.
  • A prepayment methodology for the callable advance has been added. Similar to the puttable advance, the prepayment for the callable advance is model-based and provides for the HLB to be financially indifferent to advance prepayment.

The Correspondent Services Manual was updated to reflect the HLB’s 2011 Fee Schedule and minor updates were made to reflect changes in terminology.

Credit questions may be directed to Jim Bernard, VP, Credit and Correspondent Services at (212)441-6721. Collateral questions may be directed to Mike Volpe, VP, Collateral Operations at (201) 356-1081, or Bryan Gallagher, VP, Collateral Valuations at (201) 356-1148. You may also contact your Calling Officer or contact Paul Héroux directly at (212) 441-6808.

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