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Careers in banking.

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."


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--$31.5K - $42K

* consumer loan officer--$30.5K - $44K

* pension trust officer--$33K - $43K

* personal trust officer--$33K - $43.5K

* branch manager--34.5K - $44K

(Source: Robert Half International, Menlo Park, CA)


The biggest profit center for most regional banks is in commercial loans to companies borrowing capital to expand their businesses. So lending has been a traditional banking career path. But there are some new growth areas.

Dr. Heller says that asset disposition--getting rid of bad loans and collecting on them--will be a hot skill for the near future. The average asset-liability investment manager made up to $73K last year. In addition, he predicts banks will continue to need waves of new people in computer management. Heller thinks that African-American students should find particularly bright opportunities for employment in regional banks that have consolidated recently, such as BancOne, NationsBank, Key Bank (which has announced a merger with Society Bank), and perhaps Wells Fargo, if the California economy improves. "These banks have said they're looking to grow, so they'll need to hire new people," he says.

Investment banking is another fast-growing addition to most regional banks. The average investment banker or merchant banker makes from low $50K to upper $60K. MBAs who are aiming for investment services jobs at commercial banks should expect to start as either financial analysts or project coordinators. Financial analysts crunch numbers on financial statements to determine whether the investments of banks' clients--such as companies or smaller banks--are risky or safe. Many factors can affect those investments like interest rate swings or taxes, and the analyst's job is to keep clients informed. Project coordinators cover a broad range of responsibility. They are the ones who think up and actually bring financial services, such as photos on bank cards, to the public. Or they may compile data and report to federal and state regulators on how well their bank is meeting guidelines.

One non-traditional area for bankers is at the U.S. government's central bank system, the Federal Reserve Board.

"The Fed," as it's commonly called, comprises regional banks in 12 cities, and is probably best known for setting the nation's discount lending rate. The system keeps America's money supply flowing by acting as lender of last resort to commercial banks. All of America's paychecks, personal checks, and currency also move through this system at some point.

"Fed" jobs are best-suited for people interested in setting public policy, says Patricia Cabello, director of recruiting at the Federal Reserve Bank of New York. "One reason people come here is that the work we do here has a real impact on our overall economy," she says. For example, Cabello, who worked up through the ranks at the Fed, helped the government figure out how long it should take before local banks cash checks and put the deposit into customer accounts. Cabello says 40 percent of new hires at the New York bank last year were people of color. Salaries for college recruits range from $30,000 to $32,000. The average MBA will start at $49,000.

And don't forget job opportunities at the nation's 56 African-American banks and thrift institutions. African-American bankers may be able to advance further at these financial institutions.

"A recent graduate may find more opportunities at a place like this, where he could realistically make a goal of becoming the CEO," says Richard Greene, president of Harlem-based Carver Federal Savings Bank, the nation's largest African-American-owned financial institution.

Greene, however, admits there's a tradeoff: You'll probably make less money at African-American banks than at majority firms.

Unfortunately, a study of non-white banks last summer showed that they, too, made the majority of their loans to applicants with higher-than-average incomes. EDUCATION FOR THE FUTURE BANKER

So what will prepare you for the rigors of today's sophisticated personal and commercial finance business? Willie Spears, a 22-year banking veteran, took business administration at Grambling, and then completed certificate course work at the School of Banking of the South at Louisiana State University. Spears says well-rounded future bankers should take college courses in: accounting, real estate, credit analysis, employee relations, recruiting, and marketing. Bank president Richard Greene stresses that technical courses in computer science are essential.

If you're interested in consumer banking--where you help people open checking and savings accounts and take out residential loans--Spears recommends honing your sales and customer service skills.

If you're more analytical, you may want to work in commercial banking where you'll help businesses develop lines of credit or handle their payrolls. You'll probably train for a year longer, learning how to crunch numbers in financial statements, and processing large loans.

But you could enter the business with any number of other skills. Whiteman of the NAUB took a master's in civil engineering from Columbia, and started his career in that field before switching. Now a vice president at the Federal Reserve Bank of New York, he's taken Harvard's famous Advanced Management Program.

Whiteman advises against a banking specialty too early in one's education. He says that tomorrow's bankers will come from backgrounds as diverse as finance, telecommunications, journalism, engineering, and business administration.

Students can get a leg up on their peers, Whiteman advises, by joining professional organizations on campus. He also recommends that once young bankers have found their first job, they join trade groups such as the NAUB where, guided by club members, they can try out their managing styles in a sort of practical laboratory by working on committees.

The key to success in the banking business, as in most others, is to react to important developments--in Washington, in regional trends, at your own job--to get ahead.

Role Model Profile

Eugene Pickens Vice President, Chase Securities Inc. (Subsidiary of The Chase Manhattan Corporation) New York, New York

As a member of Chase's investment banking operation, Eugene Pickens' primary responsibilities are to originate and structure short-term public debt transactions. Since joining Chase in 1970 in the Global Credit Training Program, Pickens has held several positions, including senior client executive in the manufacturing component of North America Corporate Finance, general manager of Chase Bank International in Chicago, and client executive in the capital goods component. He also worked in the corporate banking department covering major Fortune 500 companies.

Pickens received an MBA in corporate finance from New York University and a BS in business administration from Tennessee State University. His advice to students: "Work as hard as you can to build a solid foundation while you are in school. Once you enter the workforce, it is important to continue learning and to be open to new ideas so that you can go as far as your abilities will take you."

Tony Chapelle is a freelance journalist in New York City.
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Title Annotation:Career Report/ Business
Author:Chapelle, Tony
Publication:The Black Collegian
Date:Jan 1, 1994
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