President's Report

November 1, 2005

At the Bank

Third Quarter Dividend Declared at 5.25%

At the October meeting of the Board of Directors of the Federal Home Loan Bank of New York, the Directors declared a regular quarterly cash dividend at an annualized rate of 5.25%. The dividend, based on stock held during the period July 1, 2005, through September 30, 2005, was credited to your demand account on October 31, 2005. The Home Loan Bank’s dividend rates for 2005 were:

Quarter ended Date Paid Rate
December 31, 2004 January 31, 2005 3.05%
March 31, 2005 April 29, 2005 4.70%
June 30, 2005 July 29, 2005 5.00%
September 30, 2005 October 31, 2005 5.70%

The dollar amount of the third quarter dividend will be approximately $49 million. The dividend reflects the Bank’s low-risk profile and conservative investment strategy. It represents a payout of approximately 80% of earnings for the quarter. Retained earnings after the dividend payment will be approximately $234 million. (Financial and other disclosures by the Bank, as an SEC registrant, may be found on the EDGAR portion of the SEC’s website at

This third quarter dividend continues the Home Loan Bank’s proven record of providing a fair return on our members’ capital investment. With the close of this quarter, the Bank has completed the declaration of its quarterly dividends in 2005. For 2005, the Home Loan Bank has disbursed $166 million in the year and provided an overall dividend of 4.50%. This continues the Bank’s overall solid dividend history:

Year Rate Dividend Paid
2001 6.29% $229 million
2002 4.51% $167 million
2003 4.01% $164 million
2004 1.83% $ 70 million
2005 4.50%* $166 million

*During 2004, in addition to rebuilding its margins, the Bank committed a significant portion of its net income to establish a strong retained earnings level.

FHLBNY's New Capital Plan Becomes Effective December 1, 2005

The New York Home Loan Bank’s new Capital Plan will go into effect on December 1, 2005. This is a matter that I have highlighted previously in a number of forums and communications, but because of its importance, it deserves repeating.

As required by the Gramm-Leach-Bliley Act, the Bank is moving from a subscription to an activities, risk-based capital plan. As previously reported in a 8-K on September 20, 2005, the Board of Directors of the Bank voted on September 15, 2005, to establish December 1, 2005, as the “Effective Date” of the Bank’s new Capital Plan. A detailed Information Statement regarding the Capital Plan was mailed to all stockholders on October 4, 2005, and was included in a 8-K of the same date. The Information Statement is available here.

The Bank also held a Capital Exchange “Webinar” on October 26. An 8-K of the same date includes preliminary, unaudited information on financial results for the third quarter of 2005 that was provided during the course of the Webinar. A replay of the entire Webinar is available at This link will be active until March 29, 2006.

The Bank has made a concerted effort to reach out to all members to help ensure a seamless transition and operational continuity with respect to the capital exchange. Should you have any questions about the Capital Plan, please do not hesitate to contact Jim Gilmore, Senior Vice President, Marketing and Sales, at (212) 441-6812, or me at (212) 441-6801.

Washington Update

U.S. House of Representatives Passed GSE Reform Legislation

On October 26, 2005, the full House of Representatives passed H.R. 1461, the Federal Housing Finance Reform Act of 2005. The measure was passed by a strong vote of 331 to 90. The focus of the debate properly remained on Fannie Mae and Freddie Mac. This measure does treat the Home Loan Banks quite fairly, and the bill passed with few changes from the version the House Financial Services Committee passed, 65 to 5, in May.

H.R. 1461, as passed by the House, would, if enacted, establish the Federal Housing Finance Agency (“Agency’) as an independent body in the Executive Branch. The new Agency would be administered by a Director, who would be appointed for a five-year term by the President, with the advice and consent of the Senate. The Agency would also have three Deputy Directors: one for FHLBank regulation, one for Fannie Mae and Freddie Mac regulation, and the third for “Housing.” The duties of the Deputy for Housing would include the oversight of the housing mission. The Director would also become a member of the Federal Financial Institutions Examination Council. A five-member Oversight Board, with permanent paid staff, would also be established to provide advice to the Director and to submit reports to and testify before Congress.

Congressman Paul Kanjorski (D-PA) proposed an amendment of particular interest to the Federal Home Loan Bank System dealing with the selection of GSE Board Members (for all the regulated entities). Under this amendment, which was adopted, the independent directors of the twelve Federal Home Loan Banks would be two fifths of the boards and would continue to be regulatory appointments. The independent directors would be appointed by the new Director of the Federal Housing Finance Agency from a list of individuals recommended by the new Housing Finance Oversight Board. Additionally, the amendment expands the statutory criteria for the two required public interest directors on the boards of the Home Loan Banks to include community development and economic development and allows the current appointed directors to continue to serve until their successors assume office. This amendment also restores Presidential appointees to the boards of Fannie Mae and Freddie Mac.

It should also be noted that the bill, as passed by the House, would eliminate the “grandfathering” provisions pertaining to elective member directors that are currently contained in the FHLB Act. These provisions provide that each State must have at least the same number of elective directors as it had on December 31, 1960.

Significant clouds remain regarding the bill’s ultimate future. Just prior to the House’s consideration of H.R. 1461, the White House issued a Statement of Administration Policy (“SAP”) opposing H.R. 1461. The SAP stated: “The Administration strongly believes that the housing GSEs should be focused on their core housing mission particularly with respect to low-income Americans and first time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs’ commitment to low-income homebuyers. Likewise, provisions that divert profits would lead to increased risk taking and decreased market discipline while exasperating systemic risk.” The SAP further noted that the bill "fails to include key elements that are essential to protect the safety and soundness of the housing finance system and the broader financial system at large. As a result, the Administration opposes the bill.”

The Administration’s objections, combined with concerns raised by Senators over the lack of a Fannie Mae/Freddie Mac affordable housing program and the imposition of Fannie Mae/ Freddie Mac portfolio caps at the July 2005 mark-up of the Senate’s version of the GSE regulatory reform bill, S.190, make the odds of enactment of GSE legislation during this session of Congress very slim.

The Home Loan Bank team wishes to thank you, our members, for your use of our credit products and services to expand the availability of mortgage credit, to compete effectively in your markets, and to promote strong communities.


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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