EPA Ruling Eases Mortgage Lenders' Worries
WASHINGTON - In the latest grant of relief from cleanup liability, the Environmental Protection Agency agreed this week that homeowners should not be held responsible for damage to their property inflicted by others.
Bankers said they were pleased with the ruling, which averts potential defaults on mortgages.
But the industry is still waiting for clarification of a second issue raised by the EPA: whether a bank that becomes a trustee of a municipal landfill can be held liable for cleanup costs. A ruling is expected soon.
Until the EPA raised the issue this week, it had not occurred to bankers that the government might seek reimbursement from homeowners whose land is found to be damaged and is slated for renewal under the Superfund law. S
Even mention of it gave bankers start. "That's a shoe people weren't aware was up there to be dropped," said Stephen J. Verdier, a lobbyist for the the Independent Bankers Association of America.
Municipalities with landfills, on the other hand, could be relegated to the long list of borrowers that wary banks might decide to avoid.
The EPA does not pursue municipalities whose landfills contain only household waste, but it goes after people or companies who dump more objectionable waste on such sites. Some parties held responsible have in turn sued municipalities for a share of the cleanup costs.
Robert T. Johnson, executive vice president of Valley National Bank of Arizona, recently told a House Banking subcommittee that his institution is being sued by Phoenix for money to help clean up a landfill.
Ms. Healy writes for the Medill News Service.