September 2, 2020
Amendments to the FHLBNY Capital Plan
Effective October 2, 2020
The Federal Home Loan Bank of New York (FHLBNY) is amending its Capital Plan (Plan), which defines the rights of stockholders of the FHLBNY. The amended Plan will go into effect on October 2, 2020.
The first amendment to the Plan involves a change to the Activity-Based Stock Purchase Requirement at Section 4.2 of the Plan that will require Members to purchase activity-based stock for all new and renewing Letters of Credit. The specific purchase requirement will be announced by the FHLBNY at least 10 days ahead of the implementation date. In this regard, implementation of this new purchase requirement is expected to take place no later than March 31, 2021. The purchase requirement will in no event be less than 0.10% or more than 2.50% of the outstanding principal balance of the off-balance sheet item relating to all types of new and renewing Letters of Credit which the FHLBNY has transacted on a Member’s behalf and issued under the Irrevocable Letter of Credit Agreement between the FHLBNY and the Member.
The second amendment to the Plan pertains to Section 2.2.4 of the Plan, “Limitations on Redemptions and Repurchases”. Here, the FHLBNY is adding a subsection called “FHLBNY’s Discretion to Suspend Repurchases of Excess Capital Stock”. The new subsection is intended to provide the FHLBNY with additional flexibility in managing capital in unlikely situations by allowing for the suspension of the repurchase of shares of excess Capital Stock in order to:
help prevent capital ratios falling below the FHLBNY’s regulatory-mandated requirements and Board-approved thresholds as a result of Member actions with respect to the management of advance balances; or
help assure the fulfillment of Member contractual obligations to the FHLBNY.
Upon the FHLBNY’s determination that the capital management or contractual obligation issues described above have been mitigated or resolved, the FHLBNY will reinstate the repurchase of excess Capital Stock.
Other minor non-substantive changes were made to update various regulatory references contained in the Plan.
A copy of the amended Plan that will go into effect on October 2, 2020 is available at www.fhlbny.com/capitalplan.
If you have any questions about the Capital Plan, please call me at (212) 441-6703 or your
Relationship Manager at (212) 441-6700.
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