Frequent Questions

What is EPA's policy on lenders and involuntary acquisitions by government entities?

In the 1990s, potential liability concerns were discouraging financial institutions from lending money to developers of contaminated land, and municipalities from exercising their governmental involuntary acquisition rights and performing cleanup functions on such properties. As a result, federal statutory, regulatory, and policy changes were enacted to address this problem.
Today, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, commonly referred to as Superfund) includes liability exemptions for certain lenders and others who hold secured interests in property and state or local governments that involuntarily acquire contaminated property (for example, through bankruptcy, foreclosure, or abandonment) and did not cause or contribute to the contamination. Subtitle I of the Resource Conservation and Recovery Act (RCRA) (addressing underground storage tanks (USTs)) provides a “security interest exemption� for secured creditors (i.e., lenders) a limited statutory exemption from cleanup liability for releases from petroleum USTs.
EPA has subsequently developed regulations and policy on the liability protections for lenders and local governments.
Have more questions? Submit a request