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Environmental Risk Management Policy

Manage environmental risk and compliance more effectively with Partner's help.

Dodd Frank regulations have created a much more rigorous regulatory environment. Regulators are asking banks more questions about their commercial real estate loan underwriting practices, as well as their loan monitoring practices. Chief Credit Officers are being asked to re-write and update their bank’s underwriting policies. This extends to issues like environmental risk.

In these areas of environmental policy writing, Partner can be a great resource. Partner has written policies for over 20 lenders, including some of the largest lenders in the country. Joseph Derhake, PE leads our policy-writing services, combining his technical expertise gained from 20 years of due diligence experience, his business expertise, and knowledge of the world of real estate finance. For existing clients, Partner can assist for no additional fee.

Bank Regulators

The first question is, “Who is your regulator?” The regulatory environment is slightly different from regulatory institution to institution. Some of the largest regulatory institutions in the United States are:

  • Office of the Comptroller of the Currency (OCC)
  • Federal Deposit Insurance Corporation (FDIC)
  • National Credit Union Administration (NCUA)
  • The Federal Reserve

Regulation Documents for Environmental Policy Writers

  • The Comptroller’s Handbook, Commercial Real Estate Lending, August 2013
  • The Comptroller’s Handbook, Other Real Estate Owned, September 2013
  • OCC Bulletin on Third Party Relationships, Risk Management Guidance, October 2013
  • EPA’s All Appropriate Inquiry Rule
  • ASTM E1527-2013 Standard - Phase I Environmental Site Assessments

Lender Tools to Manage Environmental Risk

Lenders should recognize some, if not all, of these tools in their environmental policy document. Defining the tools used is an important step in building a sound environmental risk management policy.

  • Lender Environmental Questionnaire
  • Environmental Desktop Report
  • Records Search with Risk Assessment (RSRA)
  • Environmental Transaction Screen
  • Phase I Environmental Site Assessment
  • Phase II Environmental Site Assessment
  • Remedial Cost Estimate