Mitigation Banking

What is a Mitigation Bank?

A mitigation bank is a wetland, stream, or other aquatic resource area that has been restored, established, enhanced, or (in certain circumstances) preserved for the purpose of providing compensation for unavoidable impacts to aquatic resources permitted under Section 404 or a similar state or local wetland regulation. A mitigation bank may be created when a government agency, corporation, nonprofit organization, or other entity undertakes these activities under a formal agreement with a regulatory agency. Mitigation banks have four distinct components:

  • The bank site: the physical acreage restored, established, enhanced, or preserved;
  • The bank instrument: the formal agreement between the bank owners and regulators establishing liability, performance standards, management and monitoring requirements, and the terms of bank credit approval;
  • The Interagency Review Team (IRT): the interagency team that provides regulatory review, approval, and oversight of the bank; and
  • The service area: the geographic area in which permitted impacts can be compensated for at a given bank.

The value of a bank is defined in “compensatory mitigation credits.” A bank’s instrument identifies the number of credits available for sale and requires the use of ecological assessment techniques to certify that those credits provide the required ecological functions. Although most mitigation banks are designed to compensate only for impacts to various wetland types, some banks have been developed to compensate specifically for impacts to streams (i.e., stream mitigation banks).