EX-4.1






Effective as of: February 9, 2018




AMENDED AND RESTATED




CAPITAL PLAN




of the




Federal Home Loan Bank of New York




Table of Contents




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Definitions	 		 	iv
	 	1.	 	 	Overview	 	 	1	 
	 	2.	 	 	The Capital Structure	 	 	2	 
	 	 	 	 	 	2.1	 	 	Authorized Stock 
	 	 	2	 
	 	 	 	 	 	 	 	 	2.1.1Par Value 
	 	 	2	 
	 	 	 	 	 	 	 	 	2.1.2Ownership of Retained Earnings 
	 	 	2	 
	 	 	 	 	 	2.2	 	 	Purchase, Redemption and Repurchase of Stock 
	 	 	2	 
	 	 	 	 	 	 	 	 	2.2.1Purchase of Capital Stock 
	 	 	2	 
	 	 	 	 	 	 	 	 	2.2.2Redemption of Capital Stock by Members 
	 	 	3	 
	 	 	 	 	 	 	 	 	2.2.3Repurchase of Excess Stock by the FHLBNY 
	 	 	4	 
	 	 	 	 	 	 	 	 	2.2.4Limitations on Redemptions and Repurchases 
	 	 	5	 
	 	 	 	 	 	 	 	 	2.2.5Retirement of Redeemed and Repurchased Stock 
	 	 	6	 
	 	 	 	 	 	 	 	 	2.2.6Transfer of Capital Stock 
	 	 	6	 
	 	 	 	 	 	 	 	 	2.2.7Limitation on Converting or Exchanging Excess
Stock as Between Subclasses 
	 	 	6	 
	 	 	 	 	 	2.3	 	 	Dividends 
	 	 	7	 
	 	 	 	 	 	2.4	 	 	Rights Upon Liquidation, Merger or Consolidation of the FHLBNY 
	 	 	7	 
	 	 	 	 	 	 	 	 	2.4.1Liquidation of the FHLBNY 
	 	 	7	 
	 	 	 	 	 	 	 	 	2.4.2FHLBNY Acquired by another Federal Home Loan Bank 
	 	 	7	 
	 	 	 	 	 	 	 	 	2.4.3FHLBNY Acquires Other Federal Home Loan Bank 
	 	 	7	 
	 	3.	 	 	Responsibilities of Directors and Management and Voting of Stock	 	 	8	 
	 	 	 	 	 	3.1	 	 	Responsibilities of Directors and Management 
	 	 	8	 
	 	 	 	 	 	3.2	 	 	Voting Rights 
	 	 	9	 
	 	4.	 	 	Member Stock Purchase Requirements	 	 	10	 
	 	 	 	 	 	4.1	 	 	Membership Stock Purchase Requirement 
	 	 	10	 
	 	 	 	 	 	4.2	 	 	Activity-Based Stock Purchase Requirement 
	 	 	10	 
	 	 	 	 	 	4.3	 	 	Periodic Review of Capital Stock Purchase Requirements 
	 	 	11	 
	 	 	 	 	 	4.4	 	 	Member Compliance with Adjusted Requirements 
	 	 	12	 
	 	5.	 	 	Capital Requirements of the FHLBNY	 	 	13	 
	 	 	 	 	 	5.1	 	 	Statutory Capital Requirements 
	 	 	13	 
	 	 	 	 	 	 	 	 	5.1.1Total Capital Requirement 
	 	 	13	 
	 	 	 	 	 	 	 	 	5.1.2Leverage Capital Requirement 
	 	 	13	 
	 	 	 	 	 	 	 	 	5.1.3Permanent Capital Requirement 
	 	 	13	 
	 	 	 	 	 	 	 	 	5.1.4FHFA Authority to Require More Capital 
	 	 	13	 
	 	 	 	 	 	5.2	 	 	Risk-Based Capital Requirement 
	 	 	13	 
	 	 	 	 	 	 	 	 	5.2.1Credit Risk Capital Requirement 
	 	 	14	 
	 	 	 	 	 	 	 	 	5.2.2Market Risk Capital Requirement 
	 	 	14	 
	 	 	 	 	 	 	 	 	5.2.3Operations Risk Capital Requirement 
	 	 	15	 
	 	6.	 	 	Reporting Requirements to the Finance Agency	 	 	16	 
	 	 	 	 	 	6.1.	 	 	Changes in Membership 
	 	 	16	 
	 	 	 	 	 	6.2	 	 	Leverage and Risk Based Capital 
	 	 	16	 
	 	 	 	 	 	6.3	 	 	Voting Shares 
	 	 	16	 
	 	7.	 	 	Termination of Membership in the FHLBNY	 	 	17	 
	 	 	 	 	 	7.1	 	 	Voluntary Withdrawal from Membership 
	 	 	17	 
	 	 	 	 	 	 	 	 	7.1.1Written Notification 
	 	 	17	 
	 	 	 	 	 	 	 	 	7.1.2Access to Benefits of Membership 
	 	 	17	 
	 	 	 	 	 	 	 	 	7.1.3Finance Agency Notification 
	 	 	17	 
	 	 	 	 	 	 	 	 	7.1.4Disposition of Claims 
	 	 	17	 
	 	 	 	 	 	 	 	 	7.1.5Effective Date of Withdrawal 
	 	 	18	 
	 	 	 	 	 	7.2	 	 	Involuntary Termination of Membership 
	 	 	18	 
	 	 	 	 	 	 	 	 	7.2.1Written Notification 
	 	 	18	 
	 	 	 	 	 	 	 	 	7.2.2Access to Benefits of Membership 
	 	 	18	 
	 	 	 	 	 	 	 	 	7.2.3Disposition of Claims 
	 	 	18	 
	 	 	 	 	 	7.3	 	 	Merger or Consolidation of Members 
	 	 	19	 
	 	 	 	 	 	 	 	 	7.3.1Termination of Charter and Stock Redemption Period 
	 	 	19	 
	 	 	 	 	 	 	 	 	7.3.2Capital Stock Requirement of Surviving Member 
	 	 	19	 
	 	 	 	 	 	7.4	 	 	Merger or Consolidation of Member into a Member of another Federal
Home Loan Bank or into a Nonmember 
	 	 	20	 
	 	 	 	 	 	 	 	 	7.4.1General 
	 	 	20	 
	 	 	 	 	 	 	 	 	7.4.2Disposition of Claims 
	 	 	20	 
	 	 	 	 	 	 	 	 	7.4.3Acquiring Institution Applies for FHLBNY Membership 
	 	 	21	 
	 	 	 	 	 	7.5	 	 	Relocation of Principal Place of Business 
	 	 	21	 
	 	 	 	 	 	 	 	 	7.5.1General 
	 	 	21	 
	 	 	 	 	 	 	 	 	7.5.2Disposition of Claims 
	 	 	21	 
	 	8.	 	 	[Reserved]	 	 	22	 
	 	9.	 	 	[Reserved]	 	 	22	 
	 	10.	 	 	Amendments to the Capital Plan and Notices	 	 	23	 
	 	 	 	 	 	10.1	 	 	Amendments to the Capital Plan 
	 	 	23	 
	 	 	 	 	 	10.2	 	 	Notices Relating to the Capital Plan 
	 	 	23	 
	 	 	 	 	 	 	 	 	10.2.1 Notices by the FHLBNY 
	 	 	23	 
	 	 	 	 	 	 	 	 	10.2.2 Notices to the FHLBNY 
	 	 	23	 






11. Joint Capital Enhancement Agreement 24




11.1 Retained Earnings Enhancement Implementation and Definitions 24




11.1.1 Implementation 24




11.1.2 Definitions applicable to Sections 11.1 through 11.4 of this Capital Plan 24



	 	 	 	 	 	 	 	 	 
	 	 	 	 	11.2 Establishment of Restricted Retained Earnings 
	 	 	27	 
	 	 	 	 	11.2.1 Segregation of Account 
	 	 	27	 
	 	 	 	 	11.2.2 Funding of Account 
	 	 	27	 
	 	 	 	 	11.3 Limitation on Dividends, Stock Purchase and Stock Redemption 
	 	 	29	 
	 	 	 	 	11.3.1 General Rule on Dividends 
	 	 	29	 
	 	 	 	 	11.3.2 Limitations on Repurchase and Redemption 
	 	 	29	 
	 	 	 	 	11.4 Termination of Agreement 
	 	 	29	 
	 	 	 	 	11.4.1 Notice of Automatic Termination Event 
	 	 	29	 
	 	 	 	 	11.4.2 Notice of Voluntary Termination 
	 	 	30	 
	 	 	 	 	11.4.3 Consequences of an Automatic Termination Event or Vote to
Terminate the Agreement 
	 	 	31	 
	Appendix I – Member Stock Purchase Requirements	 	 	32	 
	 	A.	 	 	Membership Stock Purchase Requirement 
	 	 	32	 
	 	B.	 	 	Activity-Based Stock Purchase Requirement 
	 	 	32	 






1




Definitions




For purposes of the Capital Plan, all capitalized terms used but not defined elsewhere have
the meanings set forth below. In the Capital Plan unless the context otherwise requires, words
describing the singular number include the plural and vice versa.



Activity-Based Stock means Capital Stock that is purchased and held by a Member to meet the
Member’s Activity-Based Stock Purchase Requirement.



Activity-Based Stock Purchase Requirement means the requirement under which a Member must acquire
and maintain a specific amount of Activity-Based Stock based on the specified value of certain
transactions of the Member with the FHLBNY as described in Section 4.2 of the Capital Plan.



Acquired Member Assets or AMA means assets acquired by the FHLBNY from a Member through either a
purchase or funding transaction under Part 1268 of the Regulations, and includes assets acquired
through transactions undertaken through the FHLBNY’s “Community Mortgage Asset” program.



Advances Agreement means the Bank’s Advances, Collateral Pledge and Security Agreement, as may be
amended from time to time. For avoidance of doubt, the term “advances” for purposes of the Capital
Plan shall include funding agreements between the FHLBNY and life insurance company Members.



Bank Act means the Federal Home Loan Bank Act, as amended.



Board of Directors means the Board of Directors of the FHLBNY.



Capital Plan means the capital plan of the FHLBNY as adopted by the Board of Directors and approved
by the Finance Agency, as amended from time to time.



Capital Stock means all shares of Class B Stock issued by the FHLBNY, including subclasses, in
accordance with the Bank Act, the Regulations and the Capital Plan.



Class B Stock means the capital stock that has the characteristics of Class B stock as described in
the Bank Act and the Regulations, and as specified in Section 2.1 of the Capital Plan.



Credit Risk Capital Requirement means the amount of Permanent Capital that is required to support
the FHLBNY’s credit risk, as defined by Section 932.4 of the Regulations.



Derivative Contract means a financial contract the value of which is derived from the values of one
or more underlying assets, reference rates, or indices of asset values, or credit-related events.



Excess Stock means the shares of each subclass of Capital Stock held by a Member, or Other
Institution, that exceeds the Member’s, or Other Institution’s, Membership Stock Purchase
Requirement or Activity-Based Stock Purchase Requirement related to the respective subclass.



FHFA or Finance Agency means, as the context requires in this Capital Plan, either (1) the Federal
Housing Finance Agency, (2) any successor agency, or (3) the Federal Housing Finance Board, the
predecessor agency to the Federal Housing Finance Agency.



FHLBNY means the Federal Home Loan Bank of New York.



GAAP means Generally Accepted Accounting Principles in the United States of America.



General Allowance for Losses means an allowance established by the FHLBNY in accordance with GAAP
for expected losses, but does not include any amounts held against specific assets of the FHLBNY.



Market Risk Capital Requirement means the amount of Permanent Capital to support the FHLBNY’s
market risk, as required by Section 932.5 of the Regulations.



Member means an institution that has been approved for membership by the FHLBNY in accordance with
Part 1263 of the Regulations and which has satisfied the Membership Stock Purchase Requirement.



Membership means all the rights, privileges and obligations associated with being a Member.



Membership Stock means Capital Stock that is purchased and held by each Member to meet the
Membership Stock Purchase Requirement.



Membership Stock Purchase Requirement means the level of Membership Stock that must be purchased
and maintained by a Member as a condition of Membership as described in Section 4.1 of the Capital
Plan.



Member Stock Purchase Requirements means, respectively, the Activity-Based Stock Purchase
Requirement and the Membership Stock Purchase Requirement.



Minimum Regulatory Capital Requirement means a minimum regulatory capital requirement for the
FHLBNY established by the Regulations, as referred to in Sections 5.1.1, 5.1.2, 5.1.3 and 5.2 of
the Capital Plan, or on a basis specifically applicable to the FHLBNY by the Finance Agency, as
referred to in Section 5.1.4 of the Capital Plan.



Minimum Stock Investment Requirement means the Capital Stock that a Member or Other Institution is
required, as applicable, to hold to meet its Membership Stock Purchase Requirement and the Capital
Stock that a Member or Other Institution is required, as applicable, to hold to meet its
Activity-Based Stock Purchase Requirement. For avoidance of doubt, in order for a Member or Other
Institution to be deemed to satisfy its Minimum Stock Investment Requirement it must at the
relevant point in time hold both the number of shares of Membership Stock required to meet, to the
extent applicable, the Member’s or Other Institution’s Membership Stock Purchase Requirement and
the number of shares of Activity-Based Stock required to meet, to the extent applicable, the
Member’s or Other Institution’s Activity-Based Stock Purchase Requirement.



Mortgage-related Assets means loans and participations in loans secured by residential real
property and mortgage-backed securities; loans secured by manufactured housing; certain other
mortgage-related securities; and certain loans secured by nonresidential nonfarm real property, all
as listed and described, and as may be modified from time to time, on the FHLBNY’s web site at
www.fhlbny.com/capitalplan.



Operations Risk Capital Requirement means the amount of Permanent Capital that is required to
support the FHLBNY’s operations risk, as required by Section 932.6 of the Regulations.



Other Institution means a financial institution that is not a Member and that acquires, receives or
retains Capital Stock under the Capital Plan.



Par Value means $100 per share of Capital Stock.



Permanent Capital means the retained earnings of the FHLBNY, determined in accordance with GAAP,
plus the amount paid-in for the FHLBNY’s Class B stock (whether required or excess).



Record Date means December 31st of the calendar year preceding the election of
directors.



Redemption Cancellation Fee means as applicable (i) a fee of $500, which may be imposed in the
event that a Member cancels a Redemption Notice, or a Member’s Redemption Notice is subject to
automatic cancellation, or (ii) a fee of $500 that may be imposed in the event that a Member
cancels its notification of intent to withdraw from Membership.



Redemption Notice means a written notice provided by a Member to the FHLBNY in accordance with
Section 2.2.2 of the Capital Plan requesting redemption of a specified number of shares of Capital
Stock, subject to the time limits prescribed in the Bank Act, for Class B Stock and the other
restrictions set forth in the Act, the Regulations and the Capital Plan.



Risk-based Capital Requirement means the amount of Permanent Capital that the FHLBNY must maintain
in accordance with Section 932.3 of the Regulations.



Regulations means the regulations promulgated by the Finance Agency, as amended from time to time.



Stock Redemption Period means the five-year period, as applicable, following: (i) the FHLBNY’s
receipt of a Member’s Redemption Notice, (ii) the FHLBNY’s (or as applicable, the Finance Agency’s)
receipt of a Member’s written notice to the FHLBNY (or as applicable, the Finance Agency) of intent
to withdraw from Membership, or the date of acquisition or receipt of any additional shares of
Capital Stock after the FHLBNY’s (or as applicable, the Finance Agency’s) receipt of such notice,
(iii) a Member’s termination from Membership as a result of merger or consolidation into a member
of another Federal Home Loan Bank or a nonmember, or the date of acquisition or receipt of any
additional shares of Capital Stock after such termination from Membership, (iv) a Member’s
termination from Membership as a result of the relocation of its principal place of business, or
the date of acquisition or receipt of any additional shares of Capital Stock after such termination
of Membership, or (v) a Member’s involuntary termination from Membership, or the date of
acquisition or receipt of any additional shares of Capital Stock after such termination of
Membership.



Total Assets means the total assets of the FHLBNY, as determined in accordance with GAAP.



Total Capital of the FHLBNY means the sum of Permanent Capital, the amount of any General Allowance
for Losses, and the amount of other instruments identified in the Capital Plan that the FHFA has
determined to be available to absorb losses incurred by the FHLBNY.




	1.	 	Overview






Pursuant to the Bank Act and the Regulations, the Board hereby establishes this Capital
Plan to:




provide a new statutory capital structure for the FHLBNY that can be implemented as
described herein; and




ensure that the FHLBNY is able to comply with each of its Minimum Regulatory Capital
Requirements at all times after implementation.




In developing this Capital Plan, the Board of Directors has kept in mind the cooperative
nature of the FHLBNY. The Board of Directors hereby reaffirms the FHLBNY’s continuing use
of the cooperative business model.




This document takes into account the Bank Act and the Regulations, and is not intended to
contradict the same. Under Section 26 of the Bank Act, the Finance Agency has the authority
to liquidate or reorganize a Federal Home Loan Bank and the provisions of this Capital Plan
are subject to that authority. In addition, certain discretionary decisions of the Board of
Directors under this plan may be subject to Finance Agency review and/or approval. Nothing
in this plan may be construed as abrogating, nullifying or otherwise interfering with such
Finance Agency authorities.




All references to the Regulations hereunder shall be deemed to include any successor
regulations.



2



2. The Capital Structure



2.1 Authorized Stock




The Board of Directors hereby authorizes one class of Capital Stock, Class B Stock.
Shares of Class B Stock shall be redeemable in cash at Par Value five years following the
FHLBNY’s receipt of a Member’s Redemption Notice, or in accordance with a termination of
Membership as provided in Section 7 of the Capital Plan, or in accordance with Sections
8.1.1.2, 8.1.1.4 and 8.1.1.5 of the Capital Plan. Class B Stock will have two distinct
subclasses:




Membership Stock will be purchased and held by each Member to meet the Membership
Stock Purchase Requirement established by the FHLBNY as a condition of membership.




Activity-Based Stock will be purchased and held by a Member to meet the
Activity-Based Stock Purchase Requirement established by the FHLBNY for certain
transactions with Members.




The Board of Directors may determine in the future that it wishes to authorize the issuance of
additional subclasses of Class B Stock or to authorize the issuance of Class A stock,
including one or more subclasses of Class A stock. In such cases, an amendment to this
Capital Plan will be submitted to the FHFA for approval in accordance with Section 10.1 of the
Capital Plan.




2.1.1 Par Value




All Capital Stock will be issued, redeemed, repurchased or transferred pursuant to
Section 2.2.6 of the Capital Plan at Par Value.




2.1.2 Ownership of Retained Earnings




The retained earnings, surplus, undivided profits and equity reserves, if any, of the
FHLBNY shall be owned by the holders of Class B Stock in an amount proportional to each
holder’s share of the total shares of Class B Stock; however, the holders shall have no right
to receive any portion of those items, except through the declaration of a dividend or capital
distribution approved by the Board of Directors or through the liquidation of the FHLBNY.



2.2 Purchase, Redemption and Repurchase of Stock




All Members are required to purchase and redeem Capital Stock in accordance with the
requirements of the Bank Act, the Regulations and this Capital Plan.




	 	2.2.1	 	Purchase of Capital Stock






Each Member of the FHLBNY will be required to maintain a minimum investment in Membership
Stock as a condition of membership in accordance with the requirements of Section 4 of this
Capital Plan and Appendix I hereto; in addition, each Member engaged in certain transactions
with the FHLBNY will also be required to maintain a minimum investment in Activity-Based Stock
in accordance with the requirements of Section 4 of this Capital Plan and Appendix I hereto.




The FHLBNY will not issue stock other than in accordance with 12 C.F.R. §1277.21 and the
Capital Plan. Capital Stock shall be issued to and owned only by Members, with the exception
of Other Institutions. Capital Stock may be traded only between the FHLBNY and its Members.
All Capital Stock will be issued in book entry form only. The FHLBNY will act as its own
transfer agent.




	 	2.2.2	 	Redemption of Capital Stock by Members






A Member may redeem shares of its Capital Stock by providing a Redemption Notice to the
FHLBNY. A redemption of Capital Stock may also occur in accordance with Sections 7, 8.1.1.2
and 8.1.1.5 of the Capital Plan. The FHLBNY shall (subject to the restrictions contained in
Section 2.2.4 below) redeem Capital Stock in accordance with the two preceding sentences upon
the expiration of the applicable Stock Redemption Period, provided that the FHLBNY shall not
be obligated to redeem Capital Stock unless all applicable conditions contained in the Bank
Act, the Regulations and the Capital Plan are met.




Redemption Notice




A Member that provides a Redemption Notice to the FHLBNY shall identify in that Redemption
Notice the particular shares that are the subject of the Redemption Notice by reference to
the subclass, the date acquired and the manner in which the shares were acquired. If a
Member fails to identify the particular shares within a subclass to be redeemed, the
            shares subject to redemption shall be determined using a last acquired, first redeemed
method of identification within the subclass specified by the Member. Capital Stock will
be redeemed upon the expiration of the applicable Stock Redemption Period subject to the
conditions and limitations set forth in Sections 2.2.4 and 2.2.5 of the Capital Plan. A
Member may not have more than one Redemption Notice outstanding at any time with respect
to the same shares of Capital Stock.




Cancellation of Redemption Notice




A Member may cancel its Redemption Notice by providing written notice of such cancellation
to the FHLBNY at any time prior to the expiration of the applicable Stock Redemption
Period. The FHLBNY will assess a Redemption Cancellation Fee unless the Board of
Directors determines that it has a bona fide business purpose for waiving the Redemption
Cancellation Fee, and the waiver is consistent with Section 7(j) of the Bank Act.




Repurchase of Shares Subject to a Redemption Notice




To the extent that the FHLBNY repurchases pursuant to Section 2.2.3 of the Capital Plan
            shares of Capital Stock that are subject to a Redemption Notice or Notices, the respective
repurchased shares of Capital Stock shall be deducted from the outstanding Redemption
Notice or Notices.




Automatic Cancellation of a Redemption Notice




A Redemption Notice will be automatically cancelled if the FHLBNY is prevented from
redeeming the Capital Stock within five business days of the expiration of the applicable
Stock Redemption Period because the Member would not be in compliance with its Minimum
Stock Investment Requirement. In the event of an automatic cancellation of a Member’s
Redemption Notice as provided in the preceding sentence, the FHLBNY will assess a
Redemption Cancellation Fee unless the Board of Directors determines it has a bona fide
business purpose for waiving the Redemption Cancellation Fee, and the waiver is consistent
with Section 7(j) of the Bank Act.




2.2.3 Repurchase of Excess Stock by the FHLBNY




Repurchase of Activity-Based Stock




The FHLBNY will, from time to time but not less than monthly, calculate with respect to
each Member, or Other Institution, the amount, if any, of outstanding Activity-Based Stock
that is Excess Stock. The FHLBNY will then automatically repurchase for cash all such
Excess Stock at its Par Value on the same day as the calculation, subject to the
provisions of Section 2.2.4 of the Capital Plan. The FHLBNY will notify members of
changes to the repurchase methodology, undertaken on its own initiative, no less than
fifteen business days prior to such changes.




Repurchase of Membership Stock




Upon written application by a Member, or Other Institution, to the FHLBNY or on its own
initiative, the FHLBNY may in its discretion repurchase for cash at Par Value some or all
of the outstanding shares of Membership Stock that are determined by the FHLBNY to be in
excess of the Member’s, or Other Institution’s, Membership Stock Purchase Requirement,
subject to Section 2.2.4 of the Capital Plan. If the FHLBNY determines that it will not
repurchase any or all shares of Membership Stock requested to be repurchased under a
written application by a Member, or Other Institution, the FHLBNY will promptly notify the
Member, or Other Institution, that such Membership Stock will not be repurchased. No
prior notice of repurchase of shares of Membership Stock under a written application by a
Member, or Other Institution will be given. The FHLBNY shall transmit, send or give
written notice to the Member, or Other Institution, of repurchases of shares of Membership
Stock undertaken on its own initiative at least 10 business days prior to the date of the
repurchase.




Identification of Repurchased Shares




If a Member, or Other Institution, has one or more Redemption Notices outstanding as of
the date that the FHLBNY is to repurchase shares of Capital Stock pursuant to this Section
2.2.3 of the Capital Plan, the FHLBNY shall repurchase shares of Capital Stock by first
repurchasing shares of a Member, or Other Institution, that are subject to a Redemption
Notice applicable to the subclass that is to be repurchased that has been outstanding for
the longest period of time and then, to the extent necessary, by repurchasing shares that
are subject to a Redemption Notice applicable to the subclass to be repurchased that was
outstanding for the next longest period of time and continuing in that order, to the
extent necessary, until there are no remaining outstanding Redemption Notices with respect
to the subclass to be repurchased in which instance the shares to be repurchased shall be
determined by the FHLBNY using a last acquired, first repurchased method of
identification. If a Member, or Other Institution, does not have any Redemption Notices
applicable to the subclass to be repurchased outstanding as of the date that the FHLBNY is
to repurchase shares of Capital Stock the shares to be repurchased shall be determined by
the FHLBNY using a last acquired, first repurchased method of identification.




2.2.4 Limitations on Redemptions and Repurchases




Prohibitions on Redemptions and Repurchases




The FHLBNY will not redeem or repurchase any shares of Capital Stock, if following the
redemption or repurchase the FHLBNY would not be in compliance with each of its Minimum
Regulatory Capital Requirements.




The FHLBNY will not redeem or repurchase any shares of Capital Stock if, following such
redemption or repurchase, the Member, or Other Institution, would not be in compliance
with the Member’s, or Other Institution’s, Minimum Stock Investment Requirement.




The FHLBNY will not redeem or repurchase any shares of Capital Stock without the prior
written approval of the FHFA if the FHFA or the Board of Directors has determined that the
FHLBNY has incurred or is likely to incur losses that result in or are likely to result in
“charges against the capital of the Bank,” as that phrase is defined in the Regulations.
This prohibition shall apply even if the FHLBNY is in compliance with its Minimum
Regulatory Capital Requirements, and shall remain in effect for however long the FHLBNY
continues to incur such charges, or until the FHFA determines that such charges are not
expected to continue.




FHLBNY’s Discretion to Suspend Redemptions of Capital Stock




The Board of Directors may suspend the redemption of Capital Stock, if the FHLBNY
reasonably believes that continued redemption of Capital Stock would cause the FHLBNY to
fail to meet its Minimum Regulatory Capital Requirements, would prevent the FHLBNY from
maintaining adequate capital against a potential risk that may not be adequately reflected
in its Minimum Regulatory Capital Requirements, or would otherwise prevent the FHLBNY from
operating in a safe and sound manner. If a decision is made to suspend redemption of
Capital Stock, the FHLBNY shall notify the Finance Agency in writing within two business
days of the decision, informing the Finance Agency of the reasons for the suspension and
of the FHLBNY’s strategies and time frames for addressing the conditions that led to the
suspension, as indicated in Section 1277.27(b) of the Regulations. The Finance Agency may
require the FHLBNY to re-institute the redemption of Capital Stock. The FHLBNY may not
repurchase any Capital Stock without the written permission of the Finance Agency during
any period in which the FHLBNY has suspended the redemption of Capital Stock as provided
for in this section of the Capital Plan.




Retention of Redemption or Repurchase Proceeds as Collateral




If the FHLBNY reasonably determines that there is an existing or anticipated collateral
deficiency related to any obligations owed by the Member, or Other Institution, to the
FHLBNY and the Member, or Other Institution, has failed to deliver additional collateral
to resolve the existing or anticipated collateral deficiency to the FHLBNY’s satisfaction


the FHLBNY may retain the proceeds of redemption or repurchase of Capital Stock as
additional collateral until all such obligations have been satisfied or the existing or
anticipated deficiency is resolved to the FHLBNY’s satisfaction.



3




Limitations on Redemptions and Repurchases Related to Terminations of Membership




The restrictions on redemptions and repurchases set forth in the preceding provisions of
this Section 2.2.4 of the Capital Plan apply with respect to redemptions pursuant to a
Redemption Notice as well as to redemptions in connection with a termination of Membership
in accordance with Section 7 of the Capital Plan and to redemptions in accordance with
Sections 8.1.1.2, 8.1.1.4 and 8.1.1.5 of the Capital Plan and to all repurchases of
Capital Stock held by Members and by Other Institutions.




If a Member whose Membership is terminated pursuant to Sections 7.1, 7.2, 7.4 or 7.5 of
the Capital Plan has one or more Redemption Notices outstanding as of the effective date
of its termination from Membership such Redemption Notice or Notices shall not be subject
to automatic cancellation in accordance with Section 2.2.2 of the Capital Plan. Such
Redemption Notices shall remain pending until they can be satisfied in accordance with
this Section 2.2.4 of the Capital Plan.




Pro Rata Allocation of Redemptions




If at any time more than one Member or Other Institution has outstanding a Redemption
Notice in accordance with Section 2.2.2 of the Capital Plan or redemption of Capital Stock
in connection with a termination of Membership in accordance with Sections 7.1, 7.2, 7.4
and 7.5 of the Capital Plan or redemption of Capital Stock in accordance with Sections
8.1.1.2, 8.1.1.4 and 8.1.1.5 of the Capital Plan as to which the applicable Stock
Redemption Period has expired, and if the redemption by the FHLBNY of all of the shares of
Capital Stock subject to such Redemption Notice or termination of Membership would cause
the FHLBNY to fail to be in compliance with any of its Minimum Regulatory Capital
Requirements, then the FHLBNY shall fulfill such redemptions as the FHLBNY is able to do
so from time to time, beginning with such redemptions as to which the Stock Redemption
Period expired on the earliest date and fulfilling such redemptions relating to that date
on a pro rata basis from time to time until fully satisfied, and then fulfilling such
redemptions as to which the Stock Redemption Period expired on the next earliest date in
the same manner, and continuing in that order until all such redemptions as to which the
Stock Redemption Period has expired have been fulfilled.




2.2.5 Retirement of Redeemed and Repurchased Stock




All shares of Capital Stock that are acquired by the FHLBNY pursuant to redemption or
repurchase shall be retired.




2.2.6 Transfer of Capital Stock




A Member, or Other Institution, may not transfer any Capital Stock to any other person or
entity, including another Member, except for transfers of Capital Stock occurring pursuant to
Sections 7.3 and 7.4 of the Capital Plan. Such transfers shall be deemed to be approved by
the FHLBNY as of the cancellation of the disappearing Member’s charter.




	 	2.2.7	 	Limitation on Converting or Exchanging Excess Stock as Between Subclasses






A member shall not convert or exchange (i) shares of Membership Stock that are in excess
of its Membership Stock Purchase Requirement into shares of Activity-Based Stock or (ii)
            shares of Activity-Based Stock that are in excess of its Activity-Based Stock Purchase
Requirement into shares of Membership Stock.



2.3 Dividends




The Board of Directors, in its discretion, subject to the provisions of this Section 2.3
of the Capital Plan, may declare dividends to be paid on the Capital Stock on a quarterly
basis or as otherwise determined by the Board of Directors. Each Member, or Other
Institution, that continues to hold Capital Stock is entitled to receive dividends that are
declared on all Capital Stock held during the applicable period for the period of time the
Member, or Other Institution, owns the Capital Stock. Dividends are non-cumulative with
respect to payment obligations.




Dividends may be paid only in accordance with the Bank’s Retained Earnings and Dividend
Policy, as such may be amended by the Bank’s Board of Directors from time to time. Dividend
payments may be in the form of cash, additional shares of Capital Stock, or a combination
thereof as determined by the Board of Directors. The Board of Directors may not declare or
pay a dividend if the FHLBNY is not at the time in compliance with each of its Minimum
Regulatory Capital Requirements or if following such declaration or payment of such a dividend
the FHLBNY would not be in compliance with each of its Minimum Regulatory Capital
Requirements.



2.4 Rights Upon Liquidation, Merger or Consolidation of the FHLBNY




2.4.1 Liquidation of the FHLBNY




Upon the liquidation of the FHLBNY, following the retirement of all outstanding
liabilities of the FHLBNY to its creditors, all shares of Capital Stock are to be redeemed at
Par Value, provided that if sufficient funds are not available to accomplish the redemption in
full of the Capital Stock, then such redemption shall occur on a pro rata basis among all
holders of Capital Stock. Following the redemption in full of all Capital Stock any remaining
assets will be distributed on a pro rata basis to holders of Capital Stock immediately prior
to such liquidation. This provision does not limit the authority granted the Finance Agency
under 12 U.S.C. § 1446 to prescribe rules, regulations or orders governing the liquidation of
a Federal Home Loan Bank that modify, restrict or eliminate any of the rights set forth above.




2.4.2 FHLBNY Acquired by another Federal Home Loan Bank




In the event that the FHLBNY is merged or consolidated into another Federal Home Loan
Bank, the holders of the outstanding Capital Stock of the FHLBNY will be entitled to the
rights and benefits set forth in any applicable plan of merger and/or terms established or
approved by the Finance Agency.




2.4.3 FHLBNY Acquires Other Federal Home Loan Bank




In the event that another Federal Home Loan Bank is merged or consolidated into the
FHLBNY, the holders of the outstanding stock of the other Federal Home Loan Bank will be
entitled to the rights and benefits set forth in any applicable plan of merger and/or terms
established or approved by the Finance Agency.



4




	3.	 	Responsibilities of Directors and Management and Voting of Stock





3.1 Responsibilities of Directors and Management



The Board of Directors




The duties and responsibilities of the FHLBNY’s Board of Directors under the Capital Plan
include:




approval of:




authorization to issue Capital Stock;




“operating ratios” for leverage and risk based capital to be specified in the FHLBNY’s
risk management policy in accordance with 12 C.F.R. § 1239.11;




initial minimum Member Stock Purchase Requirements;




policy limits for market and credit risk;




involuntary terminations of membership; and




dividend distributions.




periodic review and approval of:




amendments to the Capital Plan to be submitted for Finance Agency approval;




adjustments to the minimum Member Stock Purchase Requirements; and




independent annual validations of the FHLBNY’s internal risk measurement model.




monitoring of compliance with the terms and conditions of the Capital Plan, including a
continuing obligation to review and adjust the Member Stock Purchase Requirements, as
necessary to ensure that the FHLBNY remains in compliance with its Minimum Regulatory
Capital Requirements.



FHLBNY Management




The duties and responsibilities of FHLBNY management under the Capital Plan delegated by the
Board of Directors include:




maintenance of the internal risk measurement model in accordance with the
Regulations;




maintenance of procedures and systems to support the purchase and redemption of
stock under the capital structure; and




maintenance of reporting systems and procedures for Member Stock Purchase
Requirements and stock ownership.




In addition, management is also responsible for the maintenance of an effective internal
control system to provide:




Member compliance with Member Stock Purchase Requirements;




the FHLBNY’s compliance with its Minimum Regulatory Capital Requirements at all
times; and




timely reporting to the Finance Agency and the Board of Directors.



3.2 Voting Rights




Holders of Capital Stock that are Members as of the Record Date shall be entitled to vote
for the election of directors to the Board of Directors in accordance with Part 1261 of the
Regulations. For purposes of applying Part 1261 of the Regulations, the Capital Stock that a
Member is “required to hold” shall be the Member’s Minimum Stock Investment Requirement as of
the Record Date. The number of shares of Capital Stock that a particular Member, or Other
Institution (to the extent such institution is permitted to vote under Part 1261 of the
Regulations), may vote in connection with an election of directors shall be subject to the
limitations set forth in the Bank Act and Part 1261 of the Regulations.




In addition, holders of Capital Stock that are Members as of a date to be determined by the
Board of Directors shall be entitled to vote on the ratification of a merger agreement as to
which the FHLBNY is a constituent in accordance with Part 1278 of the Regulations. For
purposes of applying Part 1278 of the Regulations, the Capital Stock that a Member is
“required to own” shall be the Member’s Minimum Stock Investment Requirement as of the
aforementioned date that is to be determined by the Board of Directors. The number of shares
of Capital Stock that a particular Member, or Other Institution (to the extent such
institution is permitted to vote under Part 1278 of the Regulations), may vote in connection
with the ratification of a merger agreement shall be subject to the limitations set forth in
the Bank Act and Part 1278 of the Regulations.



5



4. Member Stock Purchase Requirements




The FHLBNY requires all Members to purchase Capital Stock of the FHLBNY. The FHLBNY’s
Member Stock Purchase Requirements are based on the potential and actual volume of, and risks
inherent in, the financial products and services provided by the FHLBNY to its Members.
Therefore:




a Member will be required to maintain a minimum Capital Stock investment of Membership
Stock for as long as the institution remains a Member of the FHLBNY, irrespective of the
volume of activity with the FHLBNY; and




a Member will also be required to purchase Activity-Based Stock in proportion to that
Member’s transactions with the FHLBNY.



4.1 Membership Stock Purchase Requirement




As a condition of Membership, each Member is required to purchase and maintain a minimum
investment in Membership Stock. The Membership Stock Purchase Requirement will be equal to a
specified percentage of the Mortgage-related Assets held by the Member, in all events rounded
up to the next even $100 increment. The FHLBNY will perform calculations of the Membership
Stock Purchase Requirement for each Member on at least an annual basis and may recalculate
such Requirement for any one or more Members more frequently as the Board of Directors may
determine from time to time. The Board of Directors may increase or decrease the Membership
Stock Purchase Requirement from time to time. Except as provided in Sections 7.2.3 and 7.4.2
of this Capital Plan, in no event will the requirement be less than the greater of (i) $1,000
or (ii) an amount to be determined by the Board of Directors that will be no less than 0.10%
or more than 0.25% of the Mortgage-related Assets held by the Member. In addition,
notwithstanding the requirements in this section, the Board of Directors in its discretion may
implement a limit on Membership Stock purchases otherwise required under this section of no
less than $25 million and no more than $100 million.




The currently approved Membership Stock Purchase Requirement is specified in Appendix I
attached hereto. Notice of changes to the Membership Stock Purchase Requirement will be
transmitted, sent or given to Members and Other Institutions at least 10 days prior to the
effective date of such changes.



4.2 Activity-Based Stock Purchase Requirement




From time to time, the FHLBNY will adopt one or more percentages or amounts for the
calculation of the Activity-Based Stock Purchase Requirement, which will require a Member or
Other Institution to purchase and maintain Activity-Based Stock in an amount equal to:




a specified percentage (but in no event less than 4.0% or more than 5.0%) of the
outstanding principal balance of advances under the Advances Agreement between the FHLBNY
and the Member; and




a specified percentage (but in no event less than 4.0% or more than 5.0%) of the
outstanding principal balance of Acquired Member Assets originated for or sold to the
FHLBNY by a Member that remain on the FHLBNY’s balance sheet plus the principal amount of
delivery commitments issued to the Member by FHLBNY for Acquired Member Assets to be held
on the FHLBNY’s balance sheet, provided that the outstanding principal balance of Acquired
Member Assets originated for or sold to the FHLBNY by a Member that were on the FHLBNY’s
balance sheet as of November 30, 2005 will not be subject to this requirement; and




a specified dollar amount ranging between (a) zero and (b) the FHLBNY’s Credit Risk
Capital Requirement for any off-balance sheet items (excluding the principal amount of
delivery commitments issued to the Member by the FHLBNY for Acquired Member Assets) listed
in Section 932.4(f), Table 2, of the Regulations which the FHLBNY has transacted on a
Member’s behalf and which are continuing, with such Credit Risk Capital Requirement being
calculated in accordance with Section 932.4(c) of the Regulations; and




a specified percentage (but in no event less than 0% or more than 5.0%) of the carrying
value on the Bank’s balance sheet of Derivative Contracts between the Member and the
FHLBNY, as determined by the FHLBNY under GAAP,




in all events rounded up to the next even $100 increment.




The Board of Directors may increase or decrease one or more of the percentages or amounts for
the calculation of the Activity-Based Stock Purchase Requirement from time to time within the
foregoing ranges. 




The currently approved percentages and amounts for the calculation of the Activity-Based Stock
Purchase Requirement are specified in Appendix I attached hereto. Notice of changes to any of
the components of the Activity-Based Stock Purchase Requirement will be transmitted, sent or
given to Members and Other Institutions at least 10 days prior to the effective date of such
changes.



4.3 Periodic Review of Capital Stock Purchase Requirements




The Board of Directors will review the FHLBNY’s Capital Plan on a continuing basis to
ascertain whether changes to the Member Stock Purchase Requirements are required in order to
ensure that the FHLBNY is in compliance with its Minimum Regulatory Capital Requirements, and
shall make adjustments as necessary.




The Board of Directors may at any time modify:




the Membership Stock Purchase Requirement within the limits defined in Section 4.1 above;
and/or




the applicable percentage or amount for any of the components of the Activity-Based Stock
Purchase Requirement, so long as such requirement is within the limits defined in Section
4.2 above.




With regard to any changes made to the Membership Stock Purchase Requirement, such changes
shall be applied to all Members without preference.




With regard to any changes made to any components of the Activity-Based Stock Purchase
Requirement, such changes shall be applied to all outstanding activity at the time that such
changes become effective, provided that such changes shall not apply to the outstanding
principal balance of Acquired Member Assets originated for or sold to the FHLBNY by a Member
that were on the FHLBNY’s balance sheet as of November 30, 2005.



4.4 Member Compliance with Adjusted Requirements




Each Member must comply promptly with any adjusted Membership Stock Purchase Requirement
or Activity-Based Stock Purchase Requirement established by the Board of Directors as
described above; however, Members will be allowed a reasonable time (as determined by the
Board of Directors from time to time, but in no event longer than three months), which period
of time shall be specified in any notice provided in accordance with Sections 4.1 or 4.2 of
the Capital Plan, to come into compliance. Each Other Institution must comply promptly with
any adjusted Activity-Based Stock Purchase Requirement established by the Board of Directors
as described above; however, Other Institutions will be allowed a reasonable time (as
determined by the Board of Directors from time to time, but in no event longer than three
months) which period of time shall be specified in any notice provided in accordance with
Section 4.2 of the Capital Plan to come into compliance. Members and Other Institutions may
reduce their outstanding activity with the FHLBNY as an alternative to purchasing additional
Activity-Based Stock.




In the event that a Member or Other Institution does not comply with any adjusted
Activity-Based Stock Purchase Requirement by the expiration of the time period specified in a
notice provided in accordance with Section 4.2 of the Capital Plan, the FHLBNY is hereby
authorized, in its discretion, to issue a notice of noncompliance to the Member or Other
Institution and, ten business days after transmitting, sending or giving such notice of
noncompliance to the Member or Other Institution, to accelerate the maturity of an amount of
advances sufficient to reduce the Member’s or Other Institution’s Activity-Based Stock
Purchase Requirement to an amount not more than the Activity-Based Stock then held by the
Member or Other Institution. Without regard to the discretion conferred on the Board of
Directors under the foregoing sentence, and without in any respect limiting the Board of
Directors’ authority under Section 7.2.1 of the Capital Plan, the Board of Directors in its
discretion may determine that a Member’s failure to comply with any adjusted Membership Stock
Purchase Requirement or Activity-Based Stock Purchase Requirement by the expiration of the
period of time specified in any notice provided in accordance with Sections 4.1 or 4.2 of the
Capital Plan constitutes the basis for a determination to terminate the Membership of a Member
for a failure to comply with a requirement of the Capital Plan.



6



5. Capital Requirements of the FHLBNY




The FHLBNY is required to maintain Permanent Capital and Total Capital to:




provide for the safe and sound operation of the FHLBNY;




protect the FHLBNY’s creditors against potential loss;




generate earnings sufficient to meet the FHLBNY’s community support and public purpose
obligations; and




comply with regulatory requirements as established by the Finance Agency.



5.1 Statutory Capital Requirements




5.1.1 Total Capital Requirement




Total Capital must be equal to at least 4.0% of the FHLBNY’s Total Assets.




5.1.2 Leverage Capital Requirement




The FHLBNY must maintain a leverage ratio of Total Capital to Total Assets of at least
5.0% of the FHLBNY’s Total Assets. For purposes of determining the leverage ratio, Total
Capital shall be computed by multiplying by 1.5 the FHLBNY’s Permanent Capital, and adding to
the product all other components of Total Capital.




5.1.3 Permanent Capital Requirement




Permanent Capital must at all times be equal to or exceed the value of the FHLBNY’s
Risk-based Capital Requirement, calculated in accordance with Section 5.2 below.




5.1.4 FHFA Authority to Require More Capital




The FHFA may, in its discretion, require the FHLBNY to hold more Total Capital or
Permanent Capital than is indicated in Sections 5.1.1 or 5.1.3 of the Capital Plan.



5.2 Risk-Based Capital Requirement




The FHLBNY’s Risk-based Capital Requirement shall be equal to the sum of:




the FHLBNY’s Credit Risk Capital Requirement,




the FHLBNY’s Market Risk Capital Requirement, and




the FHLBNY’s Operations Risk Capital Requirement as defined by the FHFA.



Unless otherwise directed by the FHFA, the FHLBNY will measure its Credit, Market and Operations
Risk Capital Requirements as of the close of business of the last business day of the month for
which the credit risk capital charge is being calculated.



5.2.1 Credit Risk Capital Requirement



The Credit Risk Capital Requirement shall be equal to the sum of the credit risk capital
charges for all assets, off-balance sheet items and derivative contracts. Credit risk percentage
requirements are established by the FHFA from time to time.



Assets



The credit risk capital charge for an asset on the FHLBNY’s balance sheet is equal to the book
value of the asset multiplied by the credit risk percentage requirement assigned to that asset
class in the Regulations.



Off-balance sheet items



The credit risk capital charge for an off-balance sheet item is equal to the credit equivalent
amount of the item (based on conversion factors provided by the FHFA) multiplied by the credit risk
percentage requirement assigned to that item in the Regulations.



Off balance sheet items include:




Asset sales with recourse where the credit risk remains with the FHLBNY




Commitments to make advances




Commitments to make or purchase other loans




Standby letters of credit




Other commitments with original maturity of over 1 year




Other commitments with original maturity of 1 year or less



Derivative Contracts



The credit risk capital charge for Derivative Contracts is equal to:




the current credit exposure for the Derivative Contract multiplied by the credit risk
percentage requirement assigned to that derivative contract, as determined in accordance
with Section 932.4 of the Regulations, plus




the potential future credit exposure for the Derivative Contract multiplied by the credit
risk percentage requirement assigned to that Derivative Contract, as determined in
accordance with Section 932.4 of the Regulations.



Guidelines for calculating capital charges on Derivative Contracts are defined by the FHFA from
time to time.



5.2.2 Market Risk Capital Requirement



The Market Risk Capital Requirement shall equal the sum of:




the market value of the FHLBNY’s portfolio at risk from movements in market rates and prices
that could occur during periods of market stress. The market value of the FHLBNY’s
portfolio at risk is determined using an internal market risk model (VaR model) that that
has been approved by the FHFA; and




the amount, if any, by which the FHLBNY’s current market value of Total Capital is less than
85% of the FHLBNY’s book value of Total Capital, where:




the current market value of the FHLBNY’s Total Capital is calculated using the
internal market risk model approved by the FHFA; and




the book value of Total Capital is the same as the amount of Total Capital reported
by the FHLBNY to the FHFA on a monthly basis.



The internal market risk model will:




estimate the market value of the FHLBNY’s assets and liabilities, off-balance sheet items,
and Derivative Contracts, including any related options, and




measure the market value of the FHLBNY’s portfolio at risk, including all assets,
liabilities, off-balance sheet items, and Derivative Contracts that represent a source of
material market risk.



5.2.3 Operations Risk Capital Requirement



The FHLBNY is required to meet its Operations Risk Capital Requirement to cover unexpected
losses associated with:




human error




fraud




unenforceability of legal contracts




deficiencies in internal controls




deficiencies in information controls



The FHLBNY will meet its Operations Risk Capital Requirement through maintenance of an amount of
Permanent Capital equal to 30% of the sum of its Credit Risk and Market Risk Capital Requirements
subject to modification as set forth below.



With FHFA approval, the FHLBNY may have an Operations Risk Capital Requirement equal to less than
30% but no less than 10% of the sum of the FHLBNY’s Credit Risk and Market Risk Capital
Requirements if (i) the FHLBNY provides an alternative methodology for assessing and quantifying an
Operations Risk Capital Requirement or (ii) if the FHLBNY obtains insurance to cover operations
risk from an insurer rated at least the second highest investment grade credit rating by an NRSRO.



6. Reporting Requirements to the Finance Agency




The following are the FHLBNY’s specific reporting requirements to the Finance Agency
pertaining to the Capital Plan.



6.1 Changes in Membership




The FHLBNY shall notify the FHFA within 10 calendar days of receipt of any notice of
withdrawal or notice of cancellation of withdrawal from Membership.



6.2 Leverage and Risk Based Capital



The FHLBNY shall report to the FHFA by the 15th business day of each month:




Risk-based Capital Requirement by component amounts, and




actual Total Capital and Permanent Capital outstanding.




Both measures are calculated as of the close of business on the last business day of the
preceding month, or more frequently, as may be required by the FHFA.



6.3 Voting Shares




On or before April 10 of each year, the FHLBNY shall submit to the FHFA a Capital Stock
report that indicates, as of the Record Date:




the number of Members located in each voting state in the FHLBNY’s district,




the number of shares of Capital Stock that each Member (identified by its docket number)
was required to hold, and




the number of shares of Capital Stock that all Members located in each voting state were
required to hold. Excess Stock will not be included in the calculation of outstanding
Capital Stock for purposes of voting.




The FHLBNY shall certify to the FHFA that, to the best of its knowledge, the information
provided in the Capital Stock report is accurate and complete, and that it has notified each
Member of its minimum Capital Stock holdings pursuant to this Capital Plan.



7



7. Termination of Membership in the FHLBNY



7.1 Voluntary Withdrawal from Membership




7.1.1 Written Notification




A Member may withdraw from Membership at any time by providing written notice of its
intent to withdraw from Membership to the FHLBNY. A Member may cancel a notice of
withdrawal prior to its effective date by providing the FHLBNY with written notice of such
cancellation. Any such cancellation will result in a Redemption Cancellation Fee with
respect to the Member’s Capital Stock unless the Board of Directors determines it has a bona
fide business purpose for waiving the imposition of the fee, and the waiver is consistent
with Section 7(j) of the Bank Act.




7.1.2 Access to Benefits of Membership




Until the effective date of a Member’s withdrawal from the FHLBNY, such Member will
continue to have access to the benefits of Membership. On and after the effective date of
the Member’s withdrawal, regardless of whether the Other Institution is required to maintain
an investment in the Capital Stock, the Other Institution will no longer have the benefits
of Membership including access to the FHLBNY’s products and services and will no longer have
any voting rights other than as provided in the Regulations, but the Other Institution will
still be entitled to any and all dividends declared on its Capital Stock until the Capital
Stock is redeemed or repurchased by the FHLBNY.




7.1.3 Finance Agency Notification




The FHLBNY shall notify the Finance Agency within ten calendar days of the receipt of
any notice of intent to withdraw from Membership or cancellation of a notice of withdrawal
from Membership.




7.1.4 Disposition of Claims




The FHLBNY shall determine an orderly manner for the disposition of transactions
outstanding with a Member that withdraws from Membership. The Stock Redemption Period for
the Capital Stock held by a Member as of the date of the FHLBNY’s receipt of the written
notification of the Member’s intent to withdraw from Membership and not already subject to a
Redemption Notice shall commence as of that date. The Stock Redemption Period for shares of
Capital Stock acquired or received by such a withdrawing Member after the date that its
notice of intent to withdraw is received by the FHLBNY will commence on the date such shares
are acquired or received. If transactions remain outstanding beyond the effective date of
the termination of Membership, the FHLBNY will not redeem any Activity-Based Stock that the
Other Institution is required to hold to comply with the Activity-Based Stock Purchase
Requirement corresponding to such outstanding transactions.




Upon the effective date of a Member’s withdrawal from Membership, it shall become an Other
Institution under this Capital Plan. Such Other Institution shall not be deemed to be
subject to the Membership Stock Purchase Requirement and the FHLBNY may repurchase
Membership Stock held by the Other Institution, that has not otherwise been redeemed by the
FHLBNY upon the expiration of an applicable Stock Redemption Period. The FHLBNY may
repurchase the Other Institution’s Activity-Based Stock, that has not otherwise been
redeemed by the FHLBNY upon the expiration of an applicable Stock Redemption Period, if the
stock is not needed to comply with the Activity-Based Stock Purchase Requirement
corresponding to such outstanding transactions, and not subject to any of the limitations on
redemption or repurchase in Section 2.2.4.




7.1.5 Effective Date of Withdrawal




The Membership of a Member that has submitted a notice of intent to withdraw, and that
has not cancelled such notice, shall terminate as of the date on which the last applicable
Stock Redemption Period ends for Capital Stock that the Member is required to hold under the
Membership Stock Purchase Requirement as of the date that the Member’s written notification
of its intent to withdraw from Membership was received by the FHLBNY.



7.2 Involuntary Termination of Membership




7.2.1 Written Notification




The Board of Directors may terminate the Membership of any Member that: (i) fails to
comply with any requirement of the Bank Act, any Regulation, or any requirement of the
Capital Plan, (ii) becomes insolvent or otherwise subject to the appointment of a
conservator, receiver, or other legal custodian under federal or state law, or (iii) would
jeopardize the safety and soundness of the FHLBNY if it were to remain a Member.




7.2.2 Access to Benefits of Membership




A Member whose Membership is terminated involuntarily shall cease being a Member of the
FHLBNY as of the date on which the Board of Directors acts to terminate the Membership.
After that date, such terminated Member shall become an Other Institution under this Capital
Plan. Such Other Institution shall have no right to obtain any of the benefits of
Membership including access to the FHLBNY’s products and services and will no longer have
any voting rights, other than as provided in the Regulations, but shall be entitled to
receive any dividends declared on its Capital Stock until the Capital Stock is redeemed or
repurchased by the FHLBNY.




7.2.3 Disposition of Claims




The FHLBNY shall determine an orderly manner for the disposition of transactions
outstanding with the Other Institution. The Stock Redemption Period for the Capital Stock
owned by a Member as of the date of its termination and not already subject to a Redemption
Notice shall commence on the date that the Member’s Membership is terminated. The Stock
Redemption Period for Capital Stock acquired or received by the Other Institution after the
date of the termination of its Membership shall commence on the date of such acquisition or
receipt. If transactions remain outstanding beyond the effective date of the termination of
Membership, the FHLBNY will not redeem any Activity-Based Stock to the extent that the Other
Institution is required to hold such stock to comply with the Activity-Based Stock Purchase
Requirement corresponding to such outstanding transactions.




Capital Stock held by the Member as of the effective date of its termination shall not be
deemed automatically to be Excess Stock solely by virtue of the termination of the Member’s
Membership; provided however, that on and after the effective date of termination, any
Membership Stock that is not required to meet the Other Institution’s Membership Stock
Purchase Requirement on the date on which the Member’s Membership was terminated that has
not otherwise been redeemed by the FHLBNY upon the expiration of an applicable Stock
Redemption Period, or any Activity-Based Stock not required to meet the Other Institution’s
Activity-Based Stock Purchase Requirement that has not otherwise been redeemed by the FHLBNY
upon the expiration of an applicable Stock Redemption Period, shall be Excess Stock that
shall be subject to repurchase by the FHLBNY; and provided further that effective upon the
expiration of the Stock Redemption Period that commences on the date that the Member’s
Membership is terminated, the terminated Member’s Membership Stock Purchase Requirement
shall be deemed to be zero. However, notwithstanding any other provision of this Capital
Plan, in the event that (a) a receiver or conservator has been appointed for the Member, or
the Member has acted to voluntarily dissolve or liquidate itself and is no longer eligible
for membership, and (b) the Bank has terminated the Member’s Membership, then the terminated
Member’s Membership Stock Purchase Requirement shall be deemed to be zero. In addition, in
the event that any Member otherwise fails to satisfy any statutory or regulatory eligibility
requirements for membership in the FHLBNY, the Board of Directors shall involuntarily
terminate that institution’s membership in accordance with Section 7.2.1, and the Membership
Stock Purchase Requirement for that Other Institution shall be deemed to be zero as of the
date on which the Bank next conducts its calculation of membership stock purchase
requirements for all members, and all Membership Stock then held by that Other Institution
shall be Excess Stock that shall be subject to repurchase by the FHLBNY. Further,
notwithstanding any of the foregoing, any repurchases and redemptions of stock permitted
hereunder shall remain subject to the limitations in Section 2.2.4 of the Capital Plan.



7.3 Merger or Consolidation of Members




7.3.1 Termination of Charter and Stock Redemption Period




If a Member’s Membership is terminated as a result of a Member’s merger or other
consolidation into another Member, the Membership shall terminate upon cancellation of the
disappearing Member’s charter. On that date, the Capital Stock held by the disappearing
Member will be transferred on the books of the FHLBNY into the name of the surviving Member.
The Stock Redemption Period for the Capital Stock previously held by the disappearing
Member shall not be deemed to commence on the date on which the disappearing Member’s
charter is cancelled, but shall commence only upon: (i) the FHLBNY’s receipt of a
Redemption Notice from the surviving Member, (ii) the FHLBNY’s receipt of the surviving
Member’s written notice of its intent to withdraw from Membership, (iii) the surviving
Member’s termination of Membership as a result of merger or consolidation into a member of
another Federal Home Loan Bank or into a nonmember, (iv) the surviving Member’s termination
of Membership as a result of the relocation of its principal place of business, or (v) the
involuntary termination of the surviving Member’s Membership. Stock Redemption Periods
applicable to a Redemption Notice or Notices received by the FHLBNY from the disappearing
Member prior to the effective date of the cancellation of the disappearing Member’s charter
shall continue to run with respect to the surviving Member from the date such Redemption
Notice was received by the FHLBNY, subject to the provisions of Section 2.2.2 of the Capital
Plan.




7.3.2 Capital Stock Requirement of Surviving Member




As of the effective date of the cancellation of the disappearing Member’s charter, the
surviving Member’s Membership Stock Purchase Requirement shall be immediately increased by
the amount of the disappearing Member’s Membership Stock Purchase Requirement immediately
prior to the cancellation of its charter. Future calculations of the surviving Member’s
Membership Stock Purchase Requirement shall be as determined in accordance with Section 4.1
of the Capital Plan, provided that if the mostly recently available data from the regulatory
reports for the surviving Member does not include the assets of the disappearing Member,
then, in that event, the Membership Stock Purchase Requirement for the surviving Member will
be calculated by adding together the most recently available regulatory report data for the
disappearing Member and for the surviving Member. As of the effective date of the
cancellation of the disappearing Member’s charter, the surviving Member’s Activity-Based
Stock Purchase Requirement will be calculated based on its current outstanding transactions
with the FHLBNY including those acquired from the disappearing Member.




	7.4	 	Merger or Consolidation of Member into a Member of another Federal Home Loan Bank or into
a Nonmember





7.4.1 General




If a Member’s Membership is terminated as a result of the Member’s merger or
consolidation into a member of another Federal Home Loan Bank or a nonmember, the Membership
shall terminate as of the date on which the Member’s charter is cancelled. On that date,
the Capital Stock held by the disappearing Member will be transferred on the books of the
FHLBNY into the name of the surviving institution. After that date the Other Institution
shall have no right to obtain any of the benefits of Membership including access to the
FHLBNY’s products and services and will no longer have any voting rights other than as
provided in the Regulations, but shall be entitled to receive any dividends declared on its
Capital Stock until the Capital Stock is redeemed or repurchased by the FHLBNY.




7.4.2 Disposition of Claims




The FHLBNY shall determine an orderly manner for the disposition of transactions
outstanding with the Other Institution. The Stock Redemption Period for the Capital Stock
then held by the Other Institution and not already subject to a Redemption Notice shall be
deemed to commence on the date on which the Member’s charter is cancelled. The Stock
Redemption Period for any Capital Stock acquired or received by the Other Institution after
the date of the termination of the Member’s Membership shall commence on the date of
acquisition or receipt. If transactions remain outstanding beyond the effective date of the
termination of Membership, the FHLBNY will not redeem any Activity-Based Stock that the
Other Institution is required to hold to comply with the Activity-Based Stock Purchase
Requirement corresponding to such outstanding transactions.




Capital Stock held by the Member as of the effective date of its termination shall not be
deemed automatically to be Excess Stock solely by virtue of the termination of the Member’s
Membership; provided however, that on and after the effective date of termination any
Membership Stock that is not required to meet the Other Institution’s Membership Stock
Purchase Requirement on the date on which the Other Institution’s Membership was terminated
that has not otherwise been redeemed by the FHLBNY upon the expiration of an applicable
Stock Redemption Period, or any Activity-Based Stock not required to meet the Other
Institution’s Activity-Based Stock Purchase Requirement that has not otherwise been redeemed
by the FHLBNY upon the expiration of an applicable Stock Redemption Period, shall be Excess
Stock that shall be subject to repurchase by the FHLBNY. In lieu of the formula specified in
Section 4.1 and section A of Appendix I of this Capital Plan, if the corporate existence of
a Member is terminated as a result of its merger into a nonmember, the FHLBNY in its
discretion may, at any time after thirty days subsequent to the merger, recalculate the
Membership Stock Purchase Requirement based solely on Mortgage-related Assets, and in doing
so may use zero dollars ($0.00) as the amount of the Mortgage-related Assets held by the
former Member, and may thereafter repurchase any resulting Excess Stock. Notwithstanding
the foregoing, any repurchases and redemptions of stock permitted hereunder shall remain
subject to the limitations in Section 2.2.4 of the Capital Plan and the provisions, if
applicable, of Section 7.4.3 of this Capital Plan.




7.4.3 Acquiring Institution Applies for FHLBNY Membership




If the institution into which the Member merges or is consolidated is eligible for
Membership and intends to become a Member of the FHLBNY, it must provide written
notification to the FHLBNY of its intention to apply for Membership within sixty calendar
days of the cancellation of the charter of the former Member.




Following the submission of this notification, the application for Membership must be
submitted within sixty calendar days. If the institution is approved for Membership, then
it must purchase the appropriate amounts, if any, of Capital Stock to comply with its
Minimum Stock Investment Requirement. Such purchase of Membership Stock must be made within
sixty days of approval for Membership and with respect to any Activity-Based Stock Purchase
Requirement, prior to engage in such transactions.




If the institution does not provide required notification and application for Membership
within the respective required time periods, or is disapproved for Membership, the
provisions of Section 7.4.2 of the Capital Plan will apply with respect to the disposition
of outstanding transactions and redemption and repurchase of Capital Stock.



7.5 Relocation of Principal Place of Business



7.5.1 General




If a Member’s Membership is terminated as a result of the relocation of the Member’s
principal place of business, as defined in the Regulations, the Membership shall terminate
on the date on which the transfer of Membership under such Regulations becomes effective.
After that date the Other Institution shall have no right to obtain any of the benefits of
Membership including access to the FHLBNY’s products and services and will no longer have
any voting rights other than as provided in the Regulations, but shall be entitled to
receive any dividends declared on its Capital Stock until the Capital Stock is redeemed or
repurchased by the FHLBNY.




7.5.2 Disposition of Claims




The FHLBNY shall determine an orderly manner for the disposition of transactions
outstanding with the Other Institution. If transactions remain outstanding beyond the
effective date of the termination of Membership, the FHLBNY will not redeem any
Activity-Based Stock that the Other Institution is required to hold to comply with the
Activity-Based Stock Purchase Requirement corresponding to such outstanding transactions.
Any Activity-Based Stock not required to meet the Other Institution’s Activity-Based
Stock Purchase Requirement that has not otherwise been redeemed by the FHLBNY upon the
expiration of an applicable Stock Redemption Period shall be Excess Stock that shall be
subject to repurchase by the FHLBNY.




If a Member relocates its principal place of business to another Bank district and transfers
its membership to the Bank in that district, its Membership Stock Purchase Requirement at
the FHLBNY shall be deemed to be zero as of the date that the Other Institution becomes a
member of the other Bank, and all Membership Stock then held at the FHLBNY by that Other
Institution shall be Excess Stock that shall be immediately subject to repurchase by the
FHLBNY. However, if a Member relocates its principal place of business to another Bank
district but does not become a member of the Bank in that district, then the Board of
Directors shall involuntarily terminate that Other Institution’s membership in accordance
with Section 7.2.1, and the Membership Stock Purchase Requirement for the Other Institution
shall be deemed to be zero as of the date on which the Bank next conducts its calculation of
membership stock purchase requirements for all members, and all Membership Stock then held
at the FHLBNY by that Other Institution shall be Excess Stock that shall be subject to
repurchase by the FHLBNY. Notwithstanding the foregoing, any repurchases and redemptions of
stock hereunder shall remain subject to the limitations in Section 2.2.4 of the Capital
Plan.



8. [Reserved]



9. [Reserved]



8



10. Amendments to the Capital Plan and Notices



10.1 Amendments to the Capital Plan




Any amendment to the Capital Plan must be approved by the Board of Directors and
submitted to the Finance Agency. The effective date for any proposed amendment shall be
contained in any request for approval that is submitted to the Finance Agency. In order to
become effective, any amendment to the Capital Plan must be approved by the Finance Agency.
The FHLNBY will transmit, send or give its Members notice in writing at least thirty days
prior to the effective date of any amendment to the Capital Plan.



10.2 Notices Relating to the Capital Plan




10.2.1 Notices by the FHLBNY




Written notices transmitted, sent or given by the FHLBNY under this Capital Plan shall
be addressed to the chief executive officer of the Member, or Other Institution, or such
other person, designated by the Member, or Other Institution. Such written notices shall be
directed to the postal address, physical address or fax number appearing in the FHLBNY’s
records from time to time.




10.2.2 Notices to the FHLBNY




Written notices given to the FHLBNY in accordance with the provisions of the Capital
Plan shall be addressed to the President of the FHLBNY and delivered to 101 Park Avenue, New
York, NY, 10178 or sent via email to fhlbny@fhlbny.com, and shall be deemed to have been
received by the FHLBNY in each case upon actual receipt by the FHLBNY. The FHLBNY may from
time to time change the address or email address at which it will receive such written
notices by transmitting, sending or giving written notice to the Member, or Other
Institution.



9



11. Joint Capital Enhancement Agreement




	11.1	 	Retained Earnings Enhancement Implementation and Definitions





11.1.1 Implementation




The provisions of sections 11.1 through 11.4 shall become effective upon, and only
upon, the occurrence of the Interim Capital Plan Amendment Implementation Date. Until the
Restriction Termination Date, in the event of any conflict between sections 11.1 through
11.4 and the remainder of this Capital Plan, the applicable terms of sections 11.1 through
11.4 shall govern, and shall be interpreted in a manner such that the restrictions set forth
therein are supplementary to, and not in lieu of, the requirements of the remainder of this
Capital Plan.




11.1.2 Definitions applicable to Sections 11.1 through 11.4 of this Capital Plan




As used in these sections 11.1 through 11.4, the following capitalized terms shall have
the following meanings.  Other capitalized terms used but not defined in these sections 11.1
through 11.4 shall have the meanings set forth in the Definitions section before Section 1
of this Capital Plan.




‘Act’ means the Federal Home Loan Bank Act, as amended as of the Effective Date.




‘Adjustment to Prior Net Income’ means either an increase, or a decrease, to a prior
calendar quarter’s Quarterly Net Income subsequent to the date on which any allocation to
Restricted Retained Earnings for such calendar quarter was made.




‘Agreement’ means the Joint Capital Enhancement Agreement adopted by the FHLBanks on the
Effective Date and amended on the date on which the FHFA has approved the Retained Earnings
Capital Plan Amendments for all of the FHLBanks that have issued capital stock pursuant to a
capital plan as of the Effective Date.




‘Allocation Termination Date’ means the date the Bank’s obligation to make allocations to
the Restricted Retained Earnings account is terminated permanently. That date is determined
pursuant to section 11.4 of this Capital Plan.




‘Automatic Termination Event’ means (i) a change in the Act, or another applicable statute,
occurring subsequent to the Effective Date, that will have the effect of creating a new, or
higher, assessment or taxation on net income or capital of the FHLBanks, or (ii) a change in
the Act, another applicable statute, or the Regulations, occurring subsequent to the
Effective Date, that will result in a higher mandatory allocation of an FHLBank’s Quarterly
Net Income to any Retained Earnings account than the annual amount, or total amount,
specified in an FHLBank’s capital plan as in effect immediately prior to the Automatic
Termination Event.




‘Automatic Termination Event Declaration Date’ means the date specified in section 11.4.1.1
or 11.4.1.2 of this Capital Plan.




‘Bank’s Total Consolidated Obligations’ means the daily average carrying value for the
calendar quarter, excluding the impact of fair value adjustments (i.e., fair value option
and hedging adjustments), of the Bank’s portion of outstanding System Consolidated
Obligations for which it is the primary obligor.




‘Declaration of Automatic Termination’ means a signed statement, executed by officers
authorized to sign on behalf of each FHLBank that is a signatory to the statement, in which
at least 2/3 of the then existing FHLBanks declare their concurrence that a specific
statutory or regulatory change meets the definition of an Automatic Termination Event.




‘Dividend’ means a distribution of cash, other property, or stock to a Stockholder with
respect to its holdings of Capital Stock.




‘Dividend Restriction Period’ means any calendar quarter: (i) that includes the REFCORP
Termination Date, or occurs subsequent to the REFCORP Termination Date; (ii) that occurs
prior to an Allocation Termination Date; and (iii) during which the amount of the Bank’s
Restricted Retained Earnings is less than the amount of the Bank’s RREM. If the amount of
the Bank’s Restricted Retained Earnings is at least equal to the amount of the Bank’s RREM,
and subsequently the Bank’s Restricted Retained Earnings becomes less than its RREM, the
Bank shall be deemed to be in a Dividend Restriction Period (unless an Allocation
Termination Date has occurred).




‘Effective Date’ means February 28, 2011.




‘GAAP’ means accounting principles generally accepted in the United States as in effect from
time to time.




‘FHFA’ means the Federal Housing Finance Agency, or any successor thereto.




‘FHLBank’ means a Federal Home Loan Bank chartered under the Act.




‘Interim Capital Plan Amendment Implementation Date’ means 31 days after the date by which
the FHFA has approved a capital plan amendment substantially the same as the Retained
Earnings Capital Plan Amendment for all of the FHLBanks that have issued capital stock
pursuant to a capital plan as of the Effective Date.




‘Net Loss’ means that the Quarterly Net Income of the Bank is negative, or that the annual
net income of the Bank calculated on the same basis is negative.




‘Quarterly Net Income’ means the amount of net income of an FHLBank for a calendar quarter
calculated in accordance with GAAP, after deducting the FHLBank’s required contributions for
that quarter to the Affordable Housing Program under section 10(j) of the Act, as reported
in the FHLBank’s quarterly and annual financial statements filed with the Securities and
Exchange Commission.




‘REFCORP Termination Date’ means the last day of the calendar quarter in which the FHLBanks’
final regular payments are made on obligations to REFCORP in accordance with Section 997.5
of the Regulations and Section 21B(f) of the Act.




‘Regular Contribution Amount’ means the result of (i) 20 percent of Quarterly Net Income;
plus (ii) 20 percent of a positive Adjustment to Prior Net Income for any prior calendar
quarter that includes the REFCORP Termination Date, or occurred subsequent to the REFCORP
Termination Date, to the extent such adjustment has not yet been made in the current
calendar quarter; minus (iii) 20 percent of the absolute value of a negative Adjustment to
Prior Net Income for any prior calendar quarter that includes the REFCORP Termination Date,
or occurred subsequent to the REFCORP Termination Date, to the extent such adjustment has
not yet been made in the current calendar quarter.




‘Regulations’ mean: (i) the rules and regulations of the Federal Housing Finance Board
(except to the extent that they may be modified, terminated, set aside or superseded by the
Director of the FHFA) in effect on the Effective Date; (ii) the rules and regulations of the
FHFA, as amended from time to time.




‘Restricted Retained Earnings’ means the cumulative amount of Quarterly Net Income and
Adjustments to Prior Net Income allocated to the Bank’s Retained Earnings account


restricted pursuant to the Retained Earnings Capital Plan Amendment, and does not include
amounts retained in: (i) any accounts in existence at the Bank on the Effective Date; or
(ii) any other Retained Earnings accounts subject to restrictions that are not part of the
terms of the Retained Earnings Capital Plan Amendment.




‘Restricted Retained Earnings Minimum’ (‘RREM’) means a level of Restricted Retained
Earnings calculated as of the last day of each calendar quarter equal to one percent of the
Bank’s Total Consolidated Obligations.




‘Restriction Termination Date’ means the date the restriction on the Bank paying Dividends
out of the Restricted Retained Earnings account, or otherwise reallocating funds from the
Restricted Retained Earnings account, is terminated permanently. That date is determined
pursuant to section 11.4 of this Capital Plan.




‘Retained Earnings’ means the retained earnings of an FHLBank calculated pursuant to GAAP.




‘Retained Earnings Capital Plan Amendment’ means the amendment to this Capital Plan, made a
part thereof, adopted effective on the Interim Capital Plan Amendment Implementation Date
adding sections 11.1 through 11.4 to this Capital Plan.




‘Special Contribution Amount’ means the result of: (i) 50 percent of Quarterly Net Income;
plus (ii) 50 percent of a positive Adjustment to Prior Net Income for any prior calendar
quarter that includes the REFCORP Termination Date, or occurred subsequent to the REFCORP
Termination Date, to the extent such adjustment has not yet been made in the current
calendar quarter; minus (iii) 50 percent of the absolute value of a negative Adjustment to
Prior Net Income for any prior calendar quarter that includes the REFCORP Termination Date,
or occurred subsequent to the REFCORP Termination Date, to the extent such adjustment has
not yet been made by the current calendar quarter.




‘Stockholder’ means (i) a Member, or (ii) an Other Institution.




‘System Consolidated Obligation’ means any bond, debenture, or note authorized under the
Regulations to be issued jointly by the FHLBanks pursuant to Section 11(a) of the Act, as
amended, or any bond or note previously issued by the Federal Housing Finance Board on
behalf of all FHLBanks pursuant to Section 11(c) of the Act, on which the FHLBanks are
jointly and severally liable, or any other instrument issued through the Office of Finance,
or any successor thereto, under the Act, that is a joint and several liability of all the
FHLBanks.




‘Total Capital’ means Retained Earnings, the amount paid-in for Capital Stock, the amount of
any general allowance for losses, and the amount of other instruments that the FHFA has
determined to be available to absorb losses incurred by the Bank.



11.2 Establishment of Restricted Retained Earnings




11.2.1 Segregation of Account




No later than the REFCORP Termination Date, the Bank shall establish an account in its
official books and records in which to allocate its Restricted Retained Earnings, with such
account being segregated on its books and records from the Bank’s Retained Earnings that are
not Restricted Retained Earnings for purposes of tracking the accumulation of Restricted
Retained Earnings and enforcing the restrictions on the use of the Restricted Retained
Earnings imposed in the Retained Earnings Capital Plan Amendment.




11.2.2 Funding of Account




11.2.2.1 Date on which Allocation Begins




The Bank shall allocate to its Restricted Retained Earnings account an amount at least
equal to the Regular Contribution Amount beginning on the REFCORP Termination Date. The
Bank shall allocate amounts to the Restricted Retained Earnings account only through
contributions from its Quarterly Net Income or Adjustments to Prior Net Income occurring on
or after the REFCORP Termination Date, but nothing in the Retained Earnings Capital Plan
Amendment shall prevent the Bank from allocating a greater percentage of its Quarterly Net
Income or positive Adjustment to Prior Net Income to its Restricted Retained Earnings
account than the percentages set forth in the Retained Earning Capital Plan Amendment.




11.2.2.2 Ongoing Allocation




During any Dividend Restriction Period that occurs before the Allocation Termination Date,
the Bank shall continue to allocate its Regular Contribution Amount (or when and if required
under subsection 11.2.2.4 below, its Special Contribution Amount) to its Restricted Retained
Earnings account.




11.2.2.3 Treatment of Quarterly Net Losses and Annual Net Losses




In the event the Bank sustains a Net Loss for a calendar quarter, the following shall apply:
(i) to the extent that its cumulative calendar year-to-date net income is positive at the
end of such quarter, the Bank may decrease the amount of its Restricted Retained Earnings
such that the cumulative addition to the Restricted Retained Earnings account calendar
year-to-date at the end of such quarter is equal to 20 percent of the amount of such
cumulative calendar year-to-date net income; (ii) to the extent that its cumulative calendar
year-to-date net income is negative at the end of such quarter (a) the Bank may decrease the
amount of its Restricted Retained Earnings account such that the cumulative addition
calendar year-to-date to the Restricted Retained Earnings at the end of such quarter is
zero, and (b) the Bank shall apply any remaining portion of the Net Loss for the calendar
quarter first to reduce Retained Earnings that are not Restricted Retained Earnings until
such Retained Earnings are reduced to zero, and thereafter may apply any remaining portion
of the Net Loss for the calendar quarter to reduce Restricted Retained Earnings; and (iii)
for any subsequent calendar quarter in the same calendar year, the Bank may decrease the
amount of its quarterly allocation to its Restricted Retained Earnings account in that
subsequent calendar quarter such that the cumulative addition to the Restricted Retained
Earnings account calendar year-to-date is equal to 20 percent of the amount of such
cumulative calendar year-to-date net income. In the event the Bank sustains a Net Loss for a
calendar year, any such Net Loss first shall be applied to reduce Retained Earnings that are
not Restricted Retained Earnings until such Retained Earnings are reduced to zero, and
thereafter any remaining portion of the Net Loss for the calendar year may be applied to
reduce Restricted Retained Earnings.




11.2.2.4 Funding at the Special Contribution Amount




If during a Dividend Restriction Period, the amount of the Bank’s Restricted Retained
Earnings decreases in any calendar quarter, except as provided in subsections 11.2.2.3(i)
and (ii)(a) above, the Bank shall allocate the Special Contribution Amount to its Restricted
Retained Earnings account beginning at the following calendar quarter-end (except as
provided in the last sentence of this subsection). Thereafter, the Bank shall continue to
allocate the Special Contribution Amount to its Restricted Retained Earnings account until
the cumulative difference between: (i) the allocations made using the Special Contribution
Amount; and (ii) the allocations that would have been made if the Regular Contribution
Amount applied, is equal to the amount of the prior decrease in the amount of its Restricted
Retained Earnings account arising from the application of subsection 11.2.2.3(ii)(b). If at
any calendar quarter-end the allocation of the Special Contribution Amount would result in a
cumulative allocation in excess of such prior decrease in the amount of Restricted Retained
Earnings: (i) the Bank may allocate such percentage of Quarterly Net Income to the
Restricted Retained Earnings account that shall exactly restore the amount of the prior
decrease, plus the amount of the Regular Contribution Amount for that quarter; and (ii) the
Bank in subsequent quarters shall revert to paying at least the Regular Contribution Amount.




11.2.2.5 Release of Restricted Retained Earnings




If the Bank’s RREM decreases from time to time due to fluctuations in the Bank’s Total
Consolidated Obligations, amounts in the Restricted Retained Earnings account in excess of
150 percent of the RREM may be released by the Bank from the restrictions otherwise imposed
on such amounts pursuant to the provisions of the Retained Earnings Capital Plan Amendment,
and reallocated to its Retained Earnings that are not Restricted Retained Earnings. Until
the Restriction Termination Date, the Bank may not otherwise reallocate amounts in its
Restricted Retained Earnings account (provided that a reduction in the Restricted Retained
Earnings account following a Net Loss pursuant to subsection 11.2.2.3 is not a
reallocation).




11.2.2.6 No Effect on Rights of Shareholders as Owners of Retained Earnings




In the event of the liquidation of the Bank, or a taking of the Bank’s Retained
Earnings by any future federal action, nothing in the Retained Earnings Capital Plan
Amendment shall change the rights of the holders of the Bank’s Class B stock that confer
ownership of Retained Earnings, including Restricted Retained Earnings, as granted under
Section 6(h) of the Act.



11.3 Limitation on Dividends, Stock Purchase and Stock Redemption



11.3.1 General Rule on Dividends




From the REFCORP Termination Date through the Restriction Termination Date, the Bank
may not pay Dividends, or otherwise reallocate funds (except as expressly provided in
subsection 11.2.2.5, and further provided that a reduction in the Restricted Retained
Earnings account following a Net Loss pursuant to subsection 11.2.2.3 is not a
reallocation), out of Restricted Retained Earnings. During a Dividend Restriction Period,
the Bank may not pay Dividends out of the amount of Quarterly Net Income required to be
allocated to Restricted Retained Earnings.




11.3.2 Limitations on Repurchase and Redemption




From the REFCORP Termination Date through the Restriction Termination Date, the Bank
shall not engage in a repurchase or redemption transaction if following such transaction the
Bank’s Total Capital as reported to the FHFA falls below the Bank’s aggregate paid-in amount
of Capital Stock.



11.4 Termination of Retained Earnings Capital Plan Amendment Obligations



11.4.1 Notice of Automatic Termination Event




11.4.1.1 Action by FHLBanks




If the Bank desires to assert that an Automatic Termination Event has occurred (or will
occur on the effective date of a change in a statute or the Regulations), the Bank shall
provide prompt written notice to all of the other FHLBanks (and provide a copy to the FHFA)
identifying the specific statutory or regulatory change that is the basis for the assertion.
For the purposes of this section, ‘prompt written notice’ means notice delivered no later
than 90 calendar days subsequent to: (1) the date the specific statutory change takes
effect; or (2) the date an interim final rule or final rule effecting the specific
regulatory change is published in the Federal Register.




If within 60 calendar days of transmission of such written notice to all of the other
FHLBanks, at least 2/3 of the then existing FHLBanks (including the Bank) execute a
Declaration of Automatic Termination concurring that the specific statutory or regulatory
change identified in the written notice constitutes an Automatic Termination Event, then the
Declaration of Automatic Termination shall be delivered by the Bank to the FHFA within 10
calendar days of the date that the Declaration of Automatic Termination is executed. After
the expiration of a 60 calendar day period that begins when the Declaration of Automatic
Termination is delivered to the FHFA, or is delivered to the FHFA by another FHLBank
pursuant to the terms of its capital plan, an Automatic Termination Event Declaration Date
shall be deemed to occur (except as provided in subsection 11.4.1.3).




If a Declaration of Automatic Termination concurring that the specific statutory or
regulatory change identified in the written notice constitutes an Automatic Termination
Event has not been executed by at least the required 2/3 of the then existing FHLBanks
within 60 calendar days of transmission of such notice to all of the other FHLBanks, the




Bank may request a determination from the FHFA that the specific statutory or regulatory
change constitutes an Automatic Termination Event. Such request must be filed with the FHFA
within 10 calendar days after the expiration of the 60 calendar day period that begins upon
transmission of the written notice of the basis of the assertion to all of the other
FHLBanks.




11.4.1.2 Action by FHFA




The Bank may request a determination from the FHFA that a specific statutory or
regulatory change constitutes an Automatic Termination Event, and may claim that an
Automatic Termination Event has occurred, or will occur, with respect to a specific
statutory or regulatory change only if the Bank has complied with the time limitations and
procedures of subsection 11.4.1.1.




If within 60 calendar days after the Bank delivers such a request to the FHFA, or another
FHLBank delivers such a request pursuant to its capital plan, the FHFA provides the
requesting FHLBank with a written determination that a specific statutory or regulatory
change is an Automatic Termination Event, then an Automatic Termination Event Declaration
Date shall be deemed to occur as of the expiration of such 60 calendar day period (except as
provided in subsection 11.4.1.3). The date of the Automatic Termination Event Declaration
Date shall be as of the expiration of such 60 calendar day period (except as provided in
subsection 11.4.1.3) no matter on which day prior to the expiration of the 60 calendar day
period the FHFA has provided its written determination.




If the FHFA fails to make a determination within 60 calendar days after an FHLBank delivers
such a request to the FHFA, then an Automatic Termination Event Declaration Date shall be
deemed to occur as of the date of the expiration of such 60 calendar day period (except as
provided in subsection 11.4.1.3); provided, however, that the FHFA may make a written
request for information from the requesting FHLBank, and toll such 60 calendar day period
from the date that the FHFA transmits its request until that FHLBank delivers to the FHFA
information responsive to its request.




If within 60 calendar days after an FHLBank delivers to the FHFA a request for determination
that a specific statutory or regulatory change constitutes an Automatic Termination Event
(or such longer period if the 60 calendar day period is tolled pursuant to the preceding
sentence), the FHFA provides that FHLBank with a written determination that a specific
statutory or regulatory change is not an Automatic Termination Event, then an Automatic
Termination Event shall not have occurred with respect to such change.




	 	11.4.1.3	 	Proviso as to Occurrence of Automatic Termination Event Declaration Date






In no case under this subsection 11.4.1 may an Automatic Termination Event Declaration
Date be deemed to occur prior to: (1) the date the specific statutory change takes effect;
or (2) the date an interim final rule or final rule effecting the specific regulatory change
is published in the Federal Register.




11.4.2 Notice of Voluntary Termination




If the FHLBanks terminate the Agreement, then the FHLBanks shall provide written notice
to the FHFA that the FHLBanks have voted to terminate the Agreement.




11.4.3  Consequences of an Automatic Termination Event or Vote to Terminate
the Agreement




11.4.3.1 Consequences of Voluntary Termination




In the event the FHLBanks deliver written notice to the FHFA that the FHLBanks have
voted to terminate the Agreement, then without any further action by the Bank or the FHFA:
(i) the date of delivery of such notice shall be an Allocation Termination Date; and (ii)
one year from the date of delivery of such notice shall be a Restriction Termination Date.




11.4.3.2 Consequences of an Automatic Termination Event Declaration Date




If an Automatic Termination Event Declaration Date has occurred, then without further
action by the Bank or the FHFA: (i) the date of the Automatic Termination Event Declaration
Date shall be an Allocation Termination Date; and (ii) one year from the date of the
Automatic Termination Event Declaration Date shall be a Restriction Termination Date.




	 	11.4.3.3	 	Deletion of Operative Provisions of Retained Earnings Capital Plan Amendment






Without any further action by the Bank or the FHFA, on the Restriction Termination
Date, sections 11.1 through 11.4 of this Capital Plan shall be deleted.







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 Appendix I — Member Stock Purchase Requirements



(Note: This Appendix I to the Capital Plan is effective as of August 1, 2017 and supersedes
the Appendix dated August 1, 2014.)



A. Membership Stock Purchase Requirement




Each Member is required to purchase Membership Stock equal to the greater of (i) $1,000
or (ii) 0.125% of the Mortgage-related Assets held by the Member.



B. Activity-Based Stock Purchase Requirement



Each Member is required to purchase Activity-Based Stock in the following amounts:



1. Advances




Members are required to purchase Activity-Based Stock equal to 4.50% of the dollar amount of
any outstanding advances under the Advances Agreement.



2. Acquired Member Assets




Members are required to purchase Activity-Based Stock equal to 4.50% of the outstanding
principal balance of the Acquired Member Assets originated for or sold to the FHLBNY by a
Member that remain on the FHLBNY’s balance sheet plus the principal amount of delivery
commitments issued to the Member by FHLBNY for Acquired Member Assets to be held on the
FHLBNY’s balance sheet, provided that the outstanding principal balance of Acquired Member
Assets originated for or sold to the FHLBNY by a Member that were on the FHLBNY’s balance
sheet as of November 30, 2005 will not be subject to this requirement.




	3.	 	Off-Balance Sheet Items






Members are required to purchase Activity-Based Stock equal to the credit equivalent amount of
any off-balance sheet items listed in Section 932.4(f), Table 2 of the Regulations which the
FHLBNY has transacted on a Member’s behalf and which are continuing, excluding the principal
amount of delivery commitments issued to the Member by FHLBNY for Acquired Member Assets,
multiplied by zero.



4. Derivative Contracts




Members are required to purchase Activity-Based Stock equal to 0% of the carrying value on the
FHLBNY’s balance sheet of Derivative Contracts between the Member and FHLBNY, as determined by
FHLBNY under GAAP.




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