(1) If the sponsor does not complete the required remedial actions within the schedule specified by the department, the department must send a notice of noncompliance to the sponsor and to the signatories.

(2) The sponsor must respond in writing to the department within fifteen days of receipt of the notice. The response shall include an explanation of why the sponsor has not implemented the required remedial actions and a proposed schedule for completion.

(3) The department, in consultation with interested signatories of the bank, shall determine whether the reasons provided by the sponsor constitute extenuating circumstances and shall determine whether to extend the schedule for implementing remedial actions.

(4) If the department determines that the schedule should be extended, the department must notify the sponsor in writing.

(5) If the department determines that the schedule should not be extended, the department must notify the sponsor by certified mail with return receipt requested that it intends to proceed with one of the following actions:

(a) Use the posted financial assurances to have the required remedial actions completed;

(b) Adjust the total number of potential credits at the bank under WAC 173-700-334; or

(c) Suspend the use and sale of available credits at the bank under WAC 173-700-603.

(6) The department may initiate the actions specified in subsection (5) of this section thirty days after the date of mailing of the department's notice to the sponsor.