What Financial Examiners Do
Financial examiners ensure compliance with laws governing financial institutions and transactions. They review balance sheets, evaluate the risk level of loans, and assess bank management.
Financial examiners typically do the following:
- Monitor the financial condition of banks and other financial institutions
- Review balance sheets, operating income and expense accounts, and loan documentation to confirm institution assets and liabilities
- Prepare reports that detail an institution’s safety and soundness
- Examine the minutes of meetings of managers and directors
- Train other examiners in the financial examination process
- Review and analyze new regulations and policies to determine their impact on the organization
- Establish guidelines for procedures and policies that comply with new and revised regulations
Financial examiners typically work in one of two main areas: risk scoping or consumer compliance.
Those working in risk scoping evaluate the health of financial institutions. Their role is to ensure that banks and other financial institutions offer safe loans and that they have enough cash on hand to handle unexpected losses. These procedures help ensure that the financial system as a whole remains stable. These examiners also evaluate the performance of bank managers.
Financial examiners working in consumer compliance monitor lending activity to ensure that borrowers are treated fairly. They ensure that banks extend loans that borrowers are likely to be able to pay back. They help borrowers avoid “predatory loans”—loans that may generate profit for banks through high interest payments but may be costly to borrowers and damage their credit scores. Examiners also ensure that banks do not discriminate against borrowers based on ethnicity or other characteristics.
How to Become a Financial Examiner
Financial examiners typically need a bachelor’s degree that includes some coursework in accounting. Entry-level examiners are trained on the job by senior examiners.
Specific requirements for financial examiners vary between federal and state governments. However, all financial examiners typically need a bachelor’s degree that includes some coursework in accounting, finance, economics, or a related field. Examiners working for the Federal Deposit Insurance Corporation (FDIC) must have at least 6 semester hours in accounting.
Once hired, financial examiners receive on-the-job training. Entry-level workers begin under the supervision of senior examiners, as they learn their job duties.
After a few years of experience, financial examiners can advance to a senior examiner position. Requirements for these positions vary by employer but often require a master’s degree in either accounting or business or becoming a Certified Public Accountant (CPA).
Analytical skills. Financial examiners need strong analytical skills to evaluate how well the managers of financial institutions are handling risk and whether the individual loans the institution makes are safe.
Detail oriented. Financial examiners must pay close attention to details when reviewing balance sheets to identify risky assets.
Math skills. Financial examiners need good basic math skills to monitor balance sheets and see if the bank’s or other financial institution’s available cash is dangerously low.
Writing skills. Financial examiners regularly write reports on the safety and soundness of financial institutions. They must be able to explain technical information clearly.
Percent change in employment, projected 2012-22
- Business and financial operations occupations
- Total, all occupations
- Financial examiners
Employment of financial examiners is projected to grow 6 percent from 2012 to 2022, slower than the average for all occupations. Implementation of new financial regulations is expected to create a need for more examiners, though declining employment in federal government will slow growth for these workers.
Employment growth for financial examiners will vary by industry group. Financial examiners’ employment is projected to grow 11 percent from 2012 to 2022 in the finance and insurance industry. Employment of financial examiners in the federal government is projected to decline 3 percent from 2012 to 2022.
Employment of financial examiners tends to increase during periods of financial instability. As bank losses and failures become more prevalent, more examiners are needed to enforce regulation. However, during normal economic times, employment tends to be steady.
Some large financial institutions that were not previously subject to Federal Deposit Insurance Corporation (FDIC) regulation have now been placed under that agency’s supervision. More examiners will be needed to monitor these institutions’ available cash levels and any potentially risky trading activity.
|Occupational Title||SOC Code||Employment, 2012||Projected Employment, 2022||Change, 2012-22||Employment by Industry|
SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program
|Occupation||Description||Entry-Level Education||2012 Median Pay|
|Accountants and auditors||
A bachelor's degree in accounting or a relevant discipline is the usual path toward becoming an accountant or auditor. Some schools offer degree programs and training for a specific kind of accounting or auditing. Master's degrees are also an option for those looking to advance their careers, make themselves more attractive in the job market, or to hone their skills. Accountants and auditors may have to obtain continuing education over their career in order to qualify for licenses and certifications.
Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.'
|Financial analysts||Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.'||Bachelor's degree||$76,950|
Loan officers evaluate, authorize, or recommend approval of loan applications for people and businesses.'
Management analysts, often called management consultants, propose ways to improve the efficiency of an organization. They advise managers on how to make organizations more profitable through reduced costs and increased revenues.'
|Personal financial advisors||Personal financial advisors give financial advice to people. They help with investments, taxes, and insurance decisions.'||Bachelor's degree||$67,520|
|Tax examiners and collectors, and revenue agents||
Tax examiners and collectors, and revenue agents ensure that federal, state, and local governments get their tax money from businesses and citizens. They review tax returns, conduct audits, identify taxes owed, and collect overdue tax payments.'