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Environmental Risk Advisor: Environmental Monitoring During the Life of the Loan

Charlotte, North Carolina - The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) recommend environmental monitoring during the life of the loan. The OCC places monitoring under the bank’s Environmental Risk Management Program to “...provide guidelines that the lending staff should follow for monitoring potential environmental concerns for the duration of loans held in the bank’s loan portfolio.”  

Similarly, the FDIC’s guidance states, “The environmental risk assessment should continue during the life of the loan by monitoring the borrower and the real property collateral for potential environmental concerns.”  While this monitoring should be addressed in the bank’s Environmental Policy, neither governing authority specifically details how this monitoring is to occur.

While there is no clear-cut guidance on how environmental monitoring during the life of the loan is to occur, the monitoring should evaluate the environmental risks associated with the collateral by monitoring the following:

About Environmental Risk Innovations
ERI is the nation’s largest environmental risk consulting firm, specializing in the management of environmental risk for commercial lenders.  ERI’s clients include a broad base of commercial lenders, from small regional banks to large banks with national footprints.  ERI develops internal environmental risk policy for commercial lenders, provides third-party review of environmental assessment reports, and conducts Records Search with Risk Assessments (RSRAs)/“desktop reviews” on commercial properties.  ERI is not a traditional environmental consulting firm that performs Phase I or Phase II Environmental Site Assessments.  As a result, ERI’s recommendations represent a truly independent, third-party opinion that conforms to the client bank’s specific risk tolerance. 

For more information on ERI's environmental consulting expertise, please contact Karen Nelson at knelson@eRiskInnovations.com or 704.548.9333.

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