### Question
How is the term nonperforming loan defined?


### Answer
The term **nonperforming loan** is defined in *26 U.S.C. § 585* as the following:

> any loan which is considered to be nonperforming by the primary Federal regulatory agency with respect to the bank

#### Citation:
  - *26 U.S.C. § 585*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter H-Banking Institutions > PART I-RULES OF GENERAL APPLICATION TO BANKING INSTITUTIONS**

