Magazine article American Banker

Maine Banks Offer Loans to Clean Poisoned Wells

Magazine article American Banker

Maine Banks Offer Loans to Clean Poisoned Wells

Article excerpt

Loans for environmental cleanup or waste treatment are often beyond the scope of community banks, but a couple of small institutions in sourther Maine are weighing in to help homeowners purify arsenic-tainted well water.

Saco & Biddeford Savings Institution in Saco, which holds $200 million of assets, and $260 million-asset Gorham Savings bank have teamed up with three larger banks in a joint project to make low-interest loans for water-purification systems.

This month, the two smaller institutions and Casco Northern Bank, Key Bank of Maine, and Fleet Bank will jointly release a brochure explaining the steps howeowners should take to have their wells tested and to treat contaminated water.

Though not mandated by any state or federal laws, the program seemed like the right thing for the bank to do, said Marc Gagnon, loan department manager at Saco & Biddeford Savings Institution.

"It's a twofold thing," Mr. Gagnon said. "Obviously we're interested in helping out in the community cases. And, secondly, when the regulators come in that's the kind of thing they look at -- especially with CRA."

Each loan will be made on a case-by-case basis by participating banks, he said.

The unsecured home improvement loans will be made available at between 10% and 12%, rther than the usual 14%, Mr. Gagnon said. Loan-to-value standards will be relaxed to 42% from the 26%-to-36% normally required for an unsecured home improvement loan. In addition, the term will be extended from the standard year per $1,000 to as much as two years per $1,000, be explained. …

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