The New South Wales Threatened Species Conservation Amendment (Biodiversity Banking) Bill 2006 was implemented to formalise the concept of biodiversity offsets. Its underpinning focus is to allow development in rapidly urbanising areas of the Sydney region and the coastal ribbon of New South Wales. Under defined circumstances biodiversity impacts due to urban development may be offset elsewhere, often in rural areas, where equivalent biodiversity values are identified. This legislation was modelled on the United States of America (US) wetland mitigation banking approach. I investigated some of the pitfalls of the US experience that should have been considered in the implementation of the New South Wales legislation and conclude that most issues appear to be associated with the narrowness of concepts around biodiversity, deficiencies in compliance, and long term monitoring and management of the offset ecosystems.