# WAC 208-512A-012: WAC 208-512A-012. Exception to general limitation—Nonconforming loans > Washington · Regulations · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_012 ## Section - **Citation:** WAC 208-512A-012 - **Heading:** WAC 208-512A-012. Exception to general limitation—Nonconforming loans - **Jurisdiction:** Washington - **Kind:** Regulations - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** Washington Administrative Code / Title 208 / Chapter 208-512A / Section 208-512A-012 ## Text (1) A loan or extension of credit that was within the limit on loans and extensions of credit when made, will not be deemed a violation of the legal lending limit and will be treated as "nonconforming" if the loan or extension of credit is no longer in conformity with the bank's limit on loans and extensions of credit because: (a) The bank's capital has declined, borrowers have subsequently merged or formed a common enterprise, lenders have merged, or the limit on loans and extensions of credit or capital rules have changed; or (b) Collateral securing the loan or extension of credit, in order to satisfy the requirements of an exception to the limit, has declined in value; or (c) In the case of an extension of credit arising from a derivative transaction (or, if required by the FDIC or Federal Reserve Board, a securities financing transaction), and measured by the internal model method described in WAC 208-512A-300 , the extension of credit subject to the lending limit increases after execution of the transaction. (2) A bank must use reasonable efforts to bring a loan or extension of credit that is nonconforming as a result of subsection (1)(a) or (c) of this section into conformity with the bank's limit on loans and extensions of credit unless to do so would be inconsistent with safe and sound banking practices. (3) A bank must bring a loan or extension of credit that is nonconforming as a result of circumstances described in subsection (1)(b) of this section into conformity with the bank's limit on loans and extensions of credit within thirty calendar days, except when judicial proceedings, regulatory actions, or other extraordinary circumstances beyond the bank's control prevent the bank from taking action. A bank must bring a loan or extension of credit that is nonconforming as a result of circumstances described in subsection (1)(b) of this section into conformity with the bank's limit on loans and extensions of credit within thirty calendar days, except when judicial proceedings, regulatory actions, or other extraordinary circumstances beyond the bank's control prevent the bank from taking action. (4) Notwithstanding any provision of this section, the director of banks may by interpretation and policy statement prescribe standards for treatment of nonconforming extensions of credit that are derivative transactions, repurchase agreements, reverse repurchase agreements, securities lending transactions, or securities borrowing transactions, and may, if required for state insured banks or state member banks, rely upon rules or interpretations of the FDIC or the Federal Reserve Board, as applicable. ## Nearby sections - [WAC 208-512A-001 WAC 208-512A-001. Promulgation of rules](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_001.md) - [WAC 208-512A-003 WAC 208-512A-003. Findings and purpose](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_003.md) - [WAC 208-512A-005 WAC 208-512A-005. "Loans and extensions of credit" and "contractual commitment to advance funds" — Defined](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_005.md) - [WAC 208-512A-007 WAC 208-512A-007. Other general chapter definitions](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_007.md) - [WAC 208-512A-009 WAC 208-512A-009. Applicability of chapter](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_009.md) - [WAC 208-512A-010 WAC 208-512A-010. General limitation on loans and extensions of credit](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_010.md) - [WAC 208-512A-011 WAC 208-512A-011. Exception to general limitation—Loans and extensions of credit fully secured by readily marketable collateral](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_011.md) - [WAC 208-512A-012 WAC 208-512A-012. Exception to general limitation—Nonconforming loans](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_012.md) - [WAC 208-512A-013 WAC 208-512A-013. Exception to general limitation—Declining capital—Inability to otherwise effectively operate in marketplace—Director discretion](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_013.md) - [WAC 208-512A-014 WAC 208-512A-014. Exception to general limitation — Extenuating facts and circumstances — Standards for division determination—Director of banks' discretion](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_014.md) - [WAC 208-512A-015 WAC 208-512A-015. Renewals and additional advances under a contractual commitment to advance funds—Project funding](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_015.md) - [WAC 208-512A-020 WAC 208-512A-020. Special rule—Discount of commercial or business paper](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_020.md) - [WAC 208-512A-030 WAC 208-512A-030. Special rule—Purchase of bankers' acceptances](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_030.md) - [WAC 208-512A-040 WAC 208-512A-040. Special rule—Readily marketable staples](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_040.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_208_512A_012. Check the current official text before relying on it. Not legal advice.