1. (a) This subchapter applies to loans or extensions of credit made on or after September 1, 1995. A loan or extension of credit existing prior to September 1, 1995, that was within a bank's legal lending limit when made but is currently in excess of the limitations of Finance Code, §34.201, is not a violation of the Finance Code, §34.201, and this subchapter, but is considered a nonconforming loan.

2. (b) A bank may renew, extend the maturity of, or restructure an existing loan or extension of credit that is exempt under this section if the bank makes a reasonable effort, consistent with safe and sound banking principles, to bring the credit into conformance with the Finance Code, §34.201, and this subchapter, unless:

   1. (1) additional funds are advanced by the bank to the borrower except as permitted by §12.5(e) of this title (relating to Percentage Lending Limits);
   2. (2) a new borrower replaces the original borrower; or
   3. (3) the banking commissioner determines that the renewal, extension, or restructuring of the loan or extension of credit is designed to evade the bank's lending limit.
3. (c) An extension, if any, of the maturity of the loan or extension of credit, in the aggregate, may not exceed the lesser of the original term of the loan or one year.

Source Note:The provisions of this §12.11 adopted to be effective March 1, 1996, 21 TexReg 1383; amended to be effective March 12, 1998, 23 TexReg 2286.