Bankers Hail Plan to Limit Lenders’ Liability on Toxics
NEW YORK — Bankers are applauding a federal plan that would shield them from suits arising from pollution caused by their borrowers or toxic waste problems on property acquired through foreclosures.
The Environmental Protection Agency wants to limit liability for creditors that lend to firms linked to hazardous waste problems.
The exemption would apply so long as banks didn’t participate in management decisions that led to the pollution, according to John Byrne, senior legislative counsel for the American Bankers Assn.
Banks fear that their deep pockets could be mined to finance an environmental cleanup for which they have no responsibility. As a result, some have avoided lending to businesses in industries with a history of pollution problems, such as the petroleum industry.
Between 20% and 30% of the 11,000 members of the Petroleum Marketers Assn. of America say banks have turned down their loan requests the past two years.
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