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Environmental Regulations and Agricultural Lending

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Abstract

sponsive to the enactment of the Comprehensive Environmental Compensation and Liability Act of 1980 (CERCLA). Nor were they moved into action by the Superfund Amendments and Reauthorization Act of 1986 (SARA). However, the attention of many lenders was attracted by a series of court decisions which imposed upon lenders liability for the cost of cleaning environmentally damaged or contaminated property once belonging to their borrowers. (See Olexa, this issue, for a discussion of this series of cases.) Contemporaneously, countless additional state and federal environmental regulations have been enacted to control and/or repair environmental damage (Olexa 1990, Bock et al.). The purpose of this paper is to describe lenders' responses to environmental regulations and case law, and the potential effect of these regulations on loan demand from the perspective of institutional management. First, the issues are identified and briefly discussed. Next is an examination of the reactions of various lenders and

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