WASHINGTON -- Legislation authorizing regulators to limit lender liability for environmental cleanup advanced smartly last week, as a Senate panel cleared the Superfund Reform Act for a floor vote.
"The fact that we're through both environmental committees is really good news," said John Byrne, senior counsel at the American Bankers Association, after the 13-4 vote by the Senate Environment and Public Works Committee.
"This train keeps moving -- I won't say it's moving fast, but its moving," he added.
A companion bill passed the House Public Works Committee July 28.
Before the Superfund reform package reaches the floors of each chamber of Congress, financing provisions of the bills must pass through the House Ways and Means Committee and the Senate Finance Committee.
Yet, Mr. Byrne said he expects the two bills to move through the two panels without difficulty.
"The Finance Committee is populated by members of Environment and Public Works, so I doubt there will be a problem there," he said.
The ABA has also written a letter to the House Ways and Means Committee urging them to vote the legislation through as quickly as possible.
"If we can get this through these dollar committees, it's looking good for fall," he added.
The Superfund reform bill has garnered support from an unusual assortment of groups, including environmentalists, bankers, chemical companies and insurers - groups that often do not get along.
"These are all adversaries," said Alfred Pollard, chief lobbyist at the Bankers Roundtable. "It takes some getting used to, but they are all saying the same thing: 'How do we get this thing done?'"
The lender liability provisions in essence will codify a 1992 Environmental Protection Agency rule.
The provisions only limit the liability of lenders for contamination that they did not cause or contribute to.
The EPA, in consultation with the Treasury, will be able to issue guidelines requiring lenders to have appropriate procedures to assess environmental risk before making a loan.
Lender liability rules ran into a roadblock in February, when the U.S. Court of Appeals for the District of Columbia overturned the 1992 EPA rule limiting lenders' environmental responsibility for properties on which they have made loans.
The court ruled that the EPA lacked statuatory authority to issue the rule, which let lenders, insurers, and others operate without fear that environmental contamination caused by borrowers would trigger cleanup liability.
Lenders were suddenly faced with the same uncertainties as before the 1992 rule, when they could have been slapped with environmental damage liability when they foreclosed on contaminated properties.
The EPA was recently denied a rehearing of the appellate court decision.