President's Report

February 28, 2005

In Washington

Congress Should Fix What Is Broken

Congress is considering GSE Regulatory Reform Legislation in response to the problems that have recently arisen at Fannie Mae and Freddie Mac. We support this objective. However, we believe that Congress should fix what is broken and create a new, independent, world-class regulator for the housing Government Sponsored Enterprises. Our contacts on The Hill indicate that most Members of Congress plan to do precisely that.

But now is not the time to throw new policy issues on the table. For instance, some have suggested limiting our members’ use of advances. This is quite troubling and unnecessary. It is important to remember that our member lenders are thoroughly regulated entities. Therefore, by definition and in fact, their use of advances is already regulated.

All of our members are either credit unions or regulated financial institutions subject to the Community Reinvestment Act. So there is no need to create duplicative regulatory processes to determine if their community lending is “mission” related.

At the Federal Home Loan Bank of New York, we have focused on being a conservative “advances” Home Loan Bank. We provide the credit products that our members have been using since 1933 to help meet the mortgage and community lending needs of their local markets. We work diligently to identify funding opportunities that permit the Home Loan Bank and our community members to fund mortgages for homes and businesses. As a result, approximately 75% of the assets of the Federal Home Loan Bank of New York are in the form of advances to our members. This public/private partnership has helped to make our District’s Main Streets hum with vitality. It is a partnership that should not be damaged.

Still other individuals have called for Congress to grant Home Loan Banks the authority to securitize mortgages. Here again this proposal takes off on a wholly different and very controversial legislative course. The proposal will open up a number of attendant administrative issues that would, no doubt, ultimately bog down the bill.

As our member lenders reach out on GSE Regulatory Reform Legislation to their Senators and Representatives in Congress, we recommend that you emphasize to policymakers three points:

  • Fix the regulatory structure.
  • Don’t damage what is not broken.
  • Congress should not be sidetracked by secondary policy proposals.

At the Bank

Advances Remain Strong at $65.8 Billion

For the month of January, average advances were $65.8 billion. This is a $200 million decrease from December 2004. The Bank experienced a payoff of $700 million in advances caused by prior acquisition of a member by a bank headquartered in another District. Our members particularly took advantage of long-term fixed- and adjustable-rate credit advance products to fund their mortgage and investment portfolios.

I would like to remind our member lenders that, as you continue with your growth strategies, having a solid liquidity plan is key to success. The Home Loan Bank can help increase your liquidity position by serving as a bridge to the capital markets and making funds available to you at maturities and terms that might otherwise be unavailable. The Home Loan Bank also enables our members to pledge otherwise illiquid assets as collateral for their liquidity needs.

Should you have any questions on how the Home Loan Bank can help you with your liquidity goals, please contact Jim Gilmore, Senior Vice President, Head of Marketing and Sales, at (212) 441-6812 or Adam Goldstein, Vice President, Director of Sales and Marketing, at (212) 441-6703.

Through our competitive pricing, innovative products, and exceptional service, we look forward to providing sustained performance and enhanced value for our members.


Alfred A. DelliBovi
President & CEO

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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This report may contain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. These statements may use forward-looking terms, such as “projected,” “expects,” “may,” or their negatives or other variations of these terms. The Bank cautions that, by their nature, forward-looking statements involve risk or uncertainty and that actual results could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular objective, projection, estimate, or prediction is realized. These forward-looking statements involve risks and uncertainties including, but not limited to, regulatory and accounting rule adjustments or requirements, changes in interest rates, changes in projected business volumes, changes in prepayment speeds on mortgage assets, the cost of our funding, changes in our membership profile, the withdrawal of one or more large members, competitive pressures, shifts in demand for our products, and general economic conditions. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

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