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.
Financial examiners held about 29,200 jobs in 2012. The industries that employed the most financial examiners in 2012 were as follows:
|Federal government, excluding postal service||24%|
|Depository credit intermediation||14|
|State government, excluding education and hospitals||12|
|Other financial investment activities||9|
Financial examiners typically work in offices. They frequently have to travel to inspect a bank onsite.
Most financial examiners worked full time in 2012.
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.
The median annual wage for financial examiners was $75,800 in May 2012. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $43,240, and the top 10 percent earned more than $140,580.
In May 2012, the median annual wages for financial examiners in the top four industries in which these examiners worked were as follows:
|Federal government, excluding postal service||$109,380|
|Other financial investment activities||78,030|
|State government, excluding education and hospitals||65,640|
|Depository credit intermediation||64,490|
Most financial examiners worked full time in 2012.
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.
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