Regulatory Alerts2005-04-22 | ISGC-2005-004-DOBState Commercial Bank Lending Limits and Market Variance for Available for Sale Securities
The Washington State Department of Financial Institutions, Division of Banks, determined that state-chartered commercial banks must exclude unrealized gains or losses from Available for Sale Securities when calculating lending limits under Title 30 RCW. The Division concluded that because the statute is silent on this asset class and lacks legislative amendment, regulators are not obligated to apply federal Office of the Comptroller of the Currency standards or incorporate market variance adjustments into the capital and surplus formula. This interpretation establishes a uniform compliance baseline for all Washington state banks, though individual institutions may still receive distinct rulings based on unique factual circumstances.
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