The Massachusetts Department of Environmental Protection (“MassDEP”) recently entered into consent orders with two financial institutions to resolve alleged Massachusetts environmental law violations occurring at two bank owned properties. 

Long Beach Mortgage Loan Trust (“Long Beach”) entered into a consent order in September 2015 with MassDEP to resolve Massachusetts Wetland Protection Act violations that allegedly occurred at a lender-owned property in Haverhill.  In April 2012, MassDEP executed a consent order with the owner (at that time) of the property for unauthorized filling and alterations made to 10,000 square feet of bordering vegetated wetlands, and for unauthorized activity in the buffer zone; that order required full restoration.  Long Beach took ownership of the property by foreclosure in July 2013 prior to any restoration work being done. Long Beach agreed to restore all of the altered area, including re-vegetation, by June 30, 2016, and to pay a $105,000 penalty, of which $30,000 will be paid immediately and $75,000 will be suspended provided a wetlands scientist submits documentation demonstrating the restored area has been maintained for five consecutive growing seasons through October 31, 2020.

In October 2015, Wells Fargo Bank, N.A. (“Wells Fargo”) entered into a consent order with MassDEP to resolve allegations of noncompliance associated with a release of heating oil in the basement of a two-family house located in Fitchburg, Massachusetts.  MassDEP found that the bank failed to take timely action to address the release, and failed to submit to MassDEP the required documentation addressing the spill, in violation of Massachusetts oil and hazardous materials cleanup regulations.  MassDEP was first notified of the release in December 2013 by the Fitchburg Board of Health, but was unable to successfully make contact with Wells Fargo.  MassDEP initiated a state-funded cleanup of the oil spill and issued a written request to Wells Fargo to provide notification and acknowledge continuation of cleanup actions at the site.  However, according to MassDEP, Wells Fargo failed to perform response actions as required, to submit the required documentation, and to respond to a subsequent written notice of noncompliance.

Wells Fargo agreed to pay a $38,190 penalty, to perform all necessary cleanup actions, to establish a point of contact for environmental matters within the Commonwealth and to provide that person’s contact information to all of its real estate brokers for its properties within the Commonwealth, including providing the brokers with instructions in the event of a future release of oil or hazardous materials.

These consent orders are a good reminder to financial institutions to identify and evaluate actual and potential environmental liabilities before purchasing or foreclosing on a property, and to conduct routine inspections of their properties to identify potential hazards and to implement appropriate measures to minimize those hazards.