In the past 40 years in the United States and, indeed, throughout the world, we have witnessed significant growth of political and regulatory forces that are focused on the protection of our natural environment.  These movements in increased regulation are most noticeable in developed countries that have been impacted by development and industries that have destroyed or degraded natural resources.  The suburbanization of the United States has destroyed millions of acres of wetlands, many of which have not been replaced.  Indeed, since the late 1700s, the U.S. Army Corps of Engineers estimates that over half the nation's wetlands have been lost to development and other activities.  These losses are widespread - - almost half of all states have lost more than 50% of their historic wetland resources.

Recent independent evaluations starting first in Florida in 1989 (Ann Redmond, Director of Mitigation for the Florida Department of Environmental Protection) and more recently in 2001 by the National Academy of Sciences ("NAS") and the General Accounting Office ("GAO") have reviewed the effectiveness of wetlands compensatory mitigation for authorized losses of wetlands and other waters under Section 404 of the Clean Water ACT ("CWA").  In its recent study, the NAS concluded that, despite progress in the last 20 years, the goal of "no net loss" of wetlands is currently not being met for wetland functions by the compensatory mitigation programs of Federal Agencies.

Since the early 1990’s, mitigation banks have proliferated across the country. The Environmental Protection Agency estimates that mitigation banking has grown from 45 banks in 1992, to 219 banks to the end of 2001 to an estimate of more than 450 in 2005. .  According to Corps of Engineers data as of 2000, there were between 370 and 400 mitigation banks nationwide, in more than 35 states.

A more interesting aspect of the ELI study reveals the shift from single user or governmental mitigation banks to entrepreneurial mitigation banks.  For example, in the early 1990s, nearly 75% of the nation's existing banks were single-user banks sponsored by state or local governments with only one private commercial bank then in operation.  By 2002, of the 214 approved banks analyzed in the ELI study, 135 are private commercial banks and 61 are single-user banks.  Since 2002, this trend has continued with federal and state governments deferring to the entrepreneurial efforts of the private mitigation banking industry.

Wetlands mitigation banking is designed to protect and enhance wetlands resources while allowing for reasonable growth and development.  Property owners whose development plans would impact degraded wetlands will be allowed to compensate for those wetlands impacts by either doing "on-site" mitigation, off-site mitigation or acquiring credits in a permitted mitigation bank.  These credits shift full legal responsibility for wetlands impact from the property owner and its site to the wetlands mitigation bank site and the wetlands mitigation banker.

In Florida, the most advanced mitigation banking state in the country, banks have become a well-received response to the failed environmental policies of the past.  Florida is now approaching its 40th permitted mitigation bank and the state has a comprehensive regulatory process that rewards good mitigation banks.

Typically, wetlands mitigation banks are located on poorly functioning and degraded wetlands sites.  Most of these sites have historically been farmed or ranched through the use of ditching, draining, filling and other techniques utilized to prepare the land for agricultural purposes.  Others may have been invaded by exotic species (such as the melaleuca tree in Southern Florida), and become highly degraded as a result of such infestations.