WASHINGTON - clean up polluted sites on which they've foreclosed, according to a survey by the Bankers Roundtable. The trade group found that 95% of the 78 largest banks paid for cleanups, and 91% altered their foreclosure policies to avoid acquiring polluted properties. "We knew there have been concerns," Bankers Roundtable Senior Director Alfred Pollard said. "This says they continue." The study supports the group's call for legislation that would insulate from environmental liability suits lenders that don't contribute to pollution, said Even Henry, manager of environmental services at Bank of America. "There needs to be a comprehensive approach to environmental legislation as it relates to lenders," Mr. Henry said. "We can do a lot relative to freeing up lending through Superfund reauthorization, but a comprehensive approach must include all regulations, including clean air and clean water," he added. Lender liability measures are pending in the House and Senate. The bills would shield lenders from liability for environmental damage caused by borrowers. At present, lenders are being held responsible for environmental cleanup when they come into possession of a property through foreclosure. Bank trust departments, which sometimes manage properties for others, have also been held liable under the Superfund law. The group found that 70% of the banks said environmental worries cause them to take greater precaution when lending in inner-city areas. "They are not saying they are not lending," Mr. Pollard said. "They are saying they are a bit more cautious. That means costs have gone up." The trade association also found that 29% of banks won't finance certain projects, such as underground storage tank removal, because of liability concerns. And, it said bankers are largely unaware of the Environmental Protection Agency's Brownfields Action Agenda, which offers buyers and lenders protection against cleanup liability. More than 40% said they had received no information about the program. But, those who have heard of the program overwhelmingly supported it. The Brownfields program is aimed at urban areas. Its name was intended to contrast with rural green fields. Jonathan Weiss, a special assistant at EPA, said he sees promise in that last finding. "That reinforces our sense that if we spread the word about our initiative and continue to progress on our action agenda, we will be successful," he said. Environmental concerns also have spread to trust departments - 96% have changed their policies to avoid cleanup liability. Nearly two-thirds said they avoid acquiring certain properties for trusts because of environmental liability concerns and 83% require property inspections to search for problems. "The theme is that the business practices of banks have been affected by the uncertainty of their environmental liability," Mr. Pollard said. "We had several bankers raise the point that 'I'm tired of worrying about my liability. I should be worrying about the liability of the borrower.'"

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