Eaton Peabody

The Federal Deposit Insurance Corporation ("FDIC") has issued guidelines for an Environmental Risk Program. The guidelines are intended to address EPA's "All Appropriate Inquiry" ("AAI") regulations (40 CFR Part 312) which became effective on November 1, 2006. A prospective purchaser that properly conducts AAI is eligible for protection from federal CERCLA liability.

The guidelines advise that FDIC-supervised financial institutions perform an "environmental risk analysis" that includes a case-by-case assessment considering risk characteristics of the transaction and the type of property. The information gained from environmental risk analysis should be considered by the institution to make an informed decision about whether to advise its borrowers to conduct all appropriate inquiry on the property.

An institution's adherence to these guidelines may require an update to previously existing Environmental Risk Assessment Questionnaires or other policies regarding environmental risk assessment.