Federal Home Loan Bank of San Francisco Plans to Continue Publishing Cost of Funds Indices Until Early 2021
Deadline Extended One Year to Accommodate Market Participants
SAN FRANCISCO, July 16, 2019 (GLOBE NEWSWIRE) -- The Federal Home Loan Bank of San Francisco announced today that it is extending its deadline for discontinuing its cost of funds indices from early 2020 to early 2021.
The Bank plans to continue publishing the 11th District Monthly Weighted Average Cost of Funds Index (COFI) in 2020 and to stop publishing the index after the announcement of the December 2020 COFI in January 2021.
The Bank also plans to continue publishing the Semiannual Weighted Average Cost of Funds Indices for the 11th District and for California in 2020 and to stop publishing the indices after the announcement of the July-December 2020 indices in February 2021.
On December 7, 2018, the Bank announced that it would stop publishing three cost of funds indices early in 2020 because of the significant decline in the number of financial institutions eligible to report the data used to calculate the indices. At the request of its regulator, the Federal Housing Finance Agency, the Bank is extending that deadline by one year to allow market participants more time to transition to an alternative reference rate.
The 11th District includes Arizona, California, and Nevada, and only savings institution members of the Bank that meet certain criteria are included in the indices. When the monthly COFI was originally developed in 1981, there were over 200 savings institutions that reported their cost of funds data to the Bank. Today there are only nine.
The UCLA Anderson Forecast, a unit of the UCLA Anderson School of Management, undertook an independent study of the utility of existing and observable reference rate indices in the absence of the 11th District cost of funds indices, funded by a research grant from the Bank. UCLA Anderson Forecast published their study, Consequences of the Discontinuation of the Eleventh District Cost of Funds Index, in April 2019.
Federal Home Loan Bank of San Francisco
The Federal Home Loan Bank of San Francisco delivers low-cost funding and other services that help member financial institutions make home mortgage loans to people of all income levels and provide credit that supports neighborhoods and communities. The Bank also funds community investment programs that help members create affordable housing and promote community economic development. The Bank’s members are headquartered in Arizona, California, and Nevada and include commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies, and community development financial institutions.
CONTACT: Amy Stewart, 415-616-2605 (office), 415-308-8959 (mobile), stewarta@fhlbsf.com
