By Paul Peduto

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In recent months, cross-functional teams from the Federal Home Loan Bank of Boston (the Bank) have been meeting with members throughout New England. Our goal has been to learn what our members are thinking and use the information to develop improved products and services.

These in-depth meetings with members have been a productive and satisfying experience for all of us here at the Bank. Our members have made a number of suggestions that either have been or will be implemented by the Bank. These include adjustments to our collateral policies, new online-banking functions, and the development of new advances products.

In response to member input, the Bank recently introduced a new advance product that gives members more flexibility in meeting their borrowing needs. Through ongoing discussions with members, we learned that many are concerned about rate compression in the next downward cycle. To address this concern, the Bank recently introduced the Slider advance, a fixed-term advance with an interest rate that adjusts periodically to changes in LIBOR and an embedded interest-rate floor feature. For this advance, the rate falls faster than LIBOR when it reaches a member-designated strike rate. (see related stories).

We have also been busy reviewing our collateral policy. We know that collateral is a critical issue for members and have made strides in recent years in fine-tuning our policies to enhance their borrowing capacity. In 2005, HELOCs  (loans disbursed under open-ended home equity lines of credit) became eligible as collateral. More recently, the Bank discontinued its collateral prioritization policy – a change that now makes it possible for members to pledge commercial real estate and HELOCs as collateral without first pledging securities.

Maintaining strong relationships with our members is important to us. Offering members the opportunity to provide input into the development of Bank services is a critical part of what we do here at the Bank. Fine-tuning our products is an ongoing process that relies on the strength of our cooperative relationship with our members.

Stay tuned for more changes to come.

For more information about Bank products and services, please contact me at 617-292-9762, or call John Baity at 617-292-9710, or Steve McHugh at 617-292-9616.

Paul M. Peduto is first vice president/sales and business development at the Federal Home Loan Bank of Boston.