Careers in Banking

By Chapelle, Tony | Diversity Employers, January-February 1994 | Go to article overview

Careers in Banking


Chapelle, Tony, Diversity Employers


If you plan to plunge into a job at any of the nation's 12,000 banks or 2300 thrift institutions, pay keen attention to Washington's vigorous watchdogging over banking.

The Clinton Administration has scared the wits out of big banks, forcing them to check whether they're living up to the Community Reinvestment Act (CRA) of 1977. The CRA is a federal law enacted to make sure that low-income borrowers have access to loans, and to keep bankers from shutting branches in low-income neighborhoods.

In October, for example, the Federal Reserve Board killed a merger between Shawmut National and another New England bank group because Shawmut has a history of rejecting more African-American mortgage borrower requests than it does white requests.

The industry is also holding its breath to see whether President Bill Clinton follows through on a plan to start a new agency that could parcel $2 billion in loans to African-American and other underrepresented groups' businesses and families via existing banks.

So Washington has certainly been busy lately in the banking business. The question is, will tough CRA enforcement and community reinvestment mean more jobs for this year's college grads? Some industry insiders whom THE BLACK COLLEGIAN interviewed made mixed predictions.

"Most banks with CRA compliance departments will need Black employees. But you can't focus on the CRA alone," says Willie Spears, an African-American banker who heads 17 branches for Hibernia National Bank in greater New Orleans. With some 250 employees under his aegis, Spears has to keep an ear to the ground for changes in hiring patterns.

"We've found that to penetrate upscale Black customer markets, we need more Black employees, too."

But Dr. Warren Heller, research director at Veribanc, a banking analysis firm in Wakefield, Massachusetts, says, "I don't think the Clinton reinvestment proposal is very significant for graduates looking for banking jobs. Two billion dollars is just a tenth of one percent of total loans made annually in the U.S. So it's just a drop of water in the bucket."

The industry's recent string of profitability is another positive development that may not help banking hopefuls anytime soon. Overall income broke records in three of the last six quarters, and banks as a group are in better shape than they've been in maybe 10 years.

Nevertheless, don't expect a hiring bonanza, warns Herbert Whiteman Jr., the immediate past president of the National Association of Urban Bankers. The NAUB is an organization of roughly 3,000 banking professionals of color that's head-quartered in Silver Spring, Maryland.

"Forget the recent profitability in the industry," Whiteman says. "We've just seen a wringout of excess employees, plants and equipment, and spending. But banks are still getting themselves into fighting trim."

A LIMP HIRING YEAR

Let's use statistics to piece together the banking job outlook. Last August, the Bureau of Labor Statistics found 1.5 million people in commercial banking jobs. Yet, U.S. Banker magazine projects there'll be 100,000 fewer slots by 1996. In 1990, there were about a quarter of a million managers working for financial institutions of all types (banks, savings and loans, credit unions, and real estate, insurance, and securities firms), according to The Occupational Outlook Handbook 1992-1993 (U.S. Bureau of Labor Statistics; Washington, D.C.). The government expects those jobs to multiply faster than most other occupations for the next 11 years.

It'll be a different story for less-skilled bank employees. The Labor Department predicts that the total of 517,000 bank tellers who worked in 1990 will shrink by the year 2005. That's because non-banks will take over many banking services and automatic teller machines will replace many clerks.

Of the five highest paying job categories in banking, four are directly related to commercial lending, the profit center for the industry:

* head of lending--$190K - $200K

* lending division leader--$90K - $125K

* marketing director--$65K - $90K

* commercial lender--$53K - $79K

* loan workout officer--$56K - $78K

Retail, or consumer banking professionals, make considerably less:

* home mortgage lender--$31.

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