On This PageSeptember 1991, No. 49

Increased concern for the environment has introduced a new dimension into risks faced by lenders.

Lender Liability Under Environmental Law
Last Updated: 09/30/91

Previously, the risks were primarily default and interest rate risks. Although environmental groups claim that banks are exaggerating their potential exposure, environmental policies and recent court cases are making it increasingly necessary for the lender to also evaluate the risks in a loan arising from the borrower's responsibilities for compliance with environmental laws and regulations.