Banks Mull Stand-Alone Bill To Restrict Cleanup Liability

WASHINGTON - Industry lobbyists may seek narrow legislation clarifying a lender's responsibility for environmental cleanup rather than trying to address the issue as part of a broader Superfund reform bill.

"I feel much stronger than I did before that we need to get an effort behind moving a stand-alone bill, mainly because there is no disagreement among lawmakers about clarifying lender liability," said Alfred Pollard, senior director at the Bankers Roundtable.

Bankers have good reason to be impatient. During the last Congress, lender liability provisions were tucked into the Superfund bill, which fell victim to partisan bickering at the end of the session.

Senate Banking Committee Chairman Alfonse M. D'Amato, R-N.Y., introduced a bill this year that would limit a lender's responsibility when property held as collateral turns out to be contaminated. Similar measures were introduced in the House by Reps. Frederick S. Upton, R-Mich., and John LaFalce, D-N.Y.

Last week, Anne Hill, vice president and senior counsel for First Interstate Bank, told Senate lawmakers that banks will think twice about lending to small businesses unless Congress acts quickly to clarify lenders' responsibility in environmental cleanups.

"Small businesses who are the customers of banks across America will continue to be unable to secure adequate financing to purchase real property which presents even potential environmental risks," Ms. Hill said before the Senate Environment and Public Works Superfund subcommittee. She testified on behalf of the American Bankers Association.

While he admitted that the chances may be better outside the Superfund arena, ABA senior counsel John Byrne said it all depends on which avenue promises the swiftest resolution to the lender liability problem.

"I'm still hopeful that in June we'll get some signals that it will move as part of Superfund, but we've got to finish this this year. We can't afford to wait any longer," Mr. Byrne said.

Rep. John Dingell, D-Mich., has introduced a Superfund package similar to the one that failed at the end of the last Congress. However, legislative sources expect Rep. Michael G. Oxley, R-Ohio, chairman of the House Commerce subcommittee on commerce, trade, and hazardous chemicals, to introduce a bill that will be the main vehicle for Superfund reform this year.

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