Environmental Liability Risk Assessment

Recently, a Maryland bank became the overnight owner of a toxic waste site through a foreclosure. The original property owners had operated a crash and garbage business on the site and obtained loans for their business venture through the bank. In 1980, their son purchased the property from his parents with mortgage monies obtained from the bank. Failing to make his loan payments, the son defaulted on the mortgage. The bank foreclosed on the property and eventually purchased the property at a foreclosure sale. Shortly after the bank's purchase of the site, toxic wastes were found on the property--the result of disposing solid wastes on the site for 10 years. The bank declined responsibility for contaminating the site and consequently for its cleanup. The Environmental Protection Agency (EPA) took corrective actions to clean up the site. EPA then handed the bill to the bank, citing the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) of 1980 (more commonly known as "Superfund"). CERCLA imposes liability on the current owners and operators of hazardous waste sites.