Murtha Cullina LLP

Protecting Lenders from Liability Under Environmental Laws

January 2010

Environmental laws and regulations enacted at both the state and federal levels pose significant risks to and obligations on financial institutions.  Laws imposing liability on “owners and operators” of contaminated property may result in direct claims against unwary lenders and fiduciaries,  particularly if the institutions do not operate within “safe harbors” created by law. In addition, those laws, as well as others closely regulating the  management and discharge of polluting substances, also affect the credit-worthiness of borrowers, their ability to meet financial obligations and the value of their collateral.

In this article, we will review the environmental laws impacting the operation of financial institutions and suggest ways those institutions can protect

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