A financial examiner looks at the health of banks and seeing to it that they are following the right guidelines for giving loans to their clients. This is technically known as risk scoping and is one of the areas of expertise that financial examiners can focus on. When looking at the lending practices of financial institutions, it is also part of your job to check if they have sufficient cash on hand to cover deficits and unexpected losses. This way, they see to it that the banking system does not crash.
Another area of focus that you could focus on as a financial examiner is what is technically known as consumer compliance. The main duties of this job have to do with making sure that all borrowers are given fair and just treatment. You see to it that banks observe their underwriting process judiciously to make sure that the loans they give are within the borrower’s means to pay. You also protect borrowers from loan sharks and predatory lending practices. These may be profitable for the lending institution due to the sky high interest charged but is really detrimental to the borrower especially when they cannot honor their loan commitments. You also make sure that banks don’t observe discriminatory lending practices, which include granting or denying a loan based on the borrower’s ethnicity.
As a financial examiner, you will be scrutinizing the documents of the financial institution. These include balance sheets, loan documents, minutes of meetings of the executive team and other account documentation. From what you have found, you will be making an analysis and then making a report of the financial soundness of the organization you are examining. If there are laws or regulations that are changed, it is also part of your responsibility to come up with another set of guidelines and procedures to govern these policy changes.
To succeed as a financial examiner, you need to possess mathematical and analytical skills. A penchant for number crunching is a must since you will be looking closely at balance sheets to check if they still have the needed cash reserves to remain in operation. Excellent analytical skills are a must since you need to know if the bank or financial institution is giving loans that have gone through the most stringent underwriting process. Otherwise, such loans are risky loans and could the bank out of business. Finally, strong writing skills are a must since report writing is part and parcel of your job.
Why Become A Financial Examiner
A career as a financial examiner is not for everybody. Not many people like computing numbers, much more finding the relationships that would prove that the bank is financially sound. However, for those who love the challenge of examining balance sheets and being able to see the big picture in terms of risk and compliance then this is a dream job. This is also a very fulfilling career in terms of the social responsibility that it entails: Financial examiners look out for the welfare of the banks to ensure that they are not taking more risk than they should and at the same time see to it that the rights of the borrowers are well-protected. On the more practical side, a financial examiner is a financially rewarding career, particularly for those who get hired by the federal government.
The U.S. Bureau of Labor Statistics revealed that financial examiners mainly work for the federal government. Some of them also work for the depository credit intermediation industry and state governments. Others work for the other financial investment activities industry. The work schedule is typically fulltime. While they prepare their reports and do their analysis in their office, travel to the site of the bank or other financial institution is required when they undertake their inspections.
Financial Examiner Salary
The Occupational Employment and Wages report of the U.S. Bureau of Labor Statistics revealed that the mean annual wage of financial examiners is $86,980. The highest paid were those who worked for the federal government followed by those who were hired by companies operating in other financial investment activities industry. Financial examiners earn more than the average pay given to business and financial operations occupations.
Financial Examiner Career Outlook
According to the U.S. Bureau of Labor Statistics, an estimated 1,800 financial examiners will be added to the 29,200 employed in 2012 in the ten-year period covering 2012 to 2022 which will mean that there will be 31,100 of them hired in 2022. This represents a growth rate of six percent which is slower than the average rate for all job types. In terms of the industry where they are hired, the employment rate of financial examiners who will be working in the finance and insurance industry is bound to be faster at 11 percent. However, the federal government is not going to be very active in hiring them. In the same ten-year period, it is projected that a three percent decline in the employment of financial examiners is going to be felt.
The employment rate of financial examiners tends to grow during times of financial stress. Regulators tend to hire more to ensure that laws and regulations are being followed and that all policies are enforced. Employment typically remains stable during good economic times.
Financial Examiner Degree
The entry point for this profession is a bachelor’s degree. Although there is no specified field for the undergraduate degree, those who wish to become financial examiners must have courses in accounting, economics, finance or related subjects. Agencies operating under the state or federal government have different laws regarding the educational requirements of financial examiners. For example, the Federal Deposit Insurance Corporation (FDIC) requires that financial examiners hold a minimum of six semester hours in accounting. However, this is not going to be enough. Newly-hired financial examiners are placed under the tutelage of senior examiners for their on-the-job training.