Sen. Jake Garn, R-Utah, reintroduced legislation Thursday to prevent adding the costs of cleaning up hazardous wastes on foreclosed properties to the already huge price tag of bailing out failed savings and loans.
Under current law, when federal agencies such as the Resolution Trust Corp. take over failed thrifts, they sometimes inherit responsibility for cleaning up toxic wastes on property that those thrifts had obtained through foreclosure."Considering the huge mandate we've given our insurance funds and the Resolution Trust Corp., we can't expect them to do their jobs efficiently and use taxpayers' money wisely if they're strapped with the financial responsibilities of cleaning up after environmental problems which they had nothing to do with creating," Garn said.
Garn, the ranking Republican on the Senate Banking Committee, said his bill would exempt federal agencies and mortgage lenders from hazardous waste cleanup responsibility only if they had nothing to do with creating the environmental problem.
It also does not protect lenders who do not scrutinize the intended or past uses of property.
Garn introduced and obtained hearings on similar legislation last year. At the hearings, Federal Deposit Insurance Corporation Chairman William Seidman called such legislation "vital for the operation of the RTC."
He urged that environmental cleanup be handled with environmental funds, and the S&L bailout be handled with banking funds.