Financial Institution Officers and Managers

Financial institution officers and managers oversee the activities of banks and personal credit institutions such as credit unions and finance companies. These establishments serve business, government, and individuals. They lend money, maintain savings, enable people and businesses to write checks for goods and services, rent safe-deposit boxes for storing valuables, manage trust funds, advise clients on investments and business affairs, issue credit cards and traveler’s checks, and take payments for gas and electric bills. There are approximately 528,000 financial managers (including those working outside of financial institutions) employed in the United States.

Financial Institution Officers and Managers Job Description

Financial institutions include commercial banks, which provide full banking service for business, government, and individuals; investment banks, which offer their clients financial counseling and brokering; Federal Reserve Banks, whose customers are affiliated banks in their districts; or other organizations such as credit unions and finance companies.

These institutions employ many officers and managers whose duties vary depending on the type and size of the firm as well as on their own area of responsibility. All financial institutions operate under the direction of a president, who is guided by policies set by the board of directors. Vice presidents are department heads who are sometimes also responsible for certain key clients. Controllers handle bank funds, properties, and equipment. Large institutions may also have treasurers, loan officers, and officers in charge of departments such as trust, credit, and investment. A number of these positions are described in more detail in the following paragraphs.

The financial institution president directs the overall activities of the bank or consumer credit organization, making sure that its objectives are achieved without violating government regulations or overlooking any legal requirements. The officers are responsible for earning as much of a return as possible on the institution’s investments within the restrictions demanded by government and sound business practices. They help set policies pertaining to investments, loans, interest, and reserves. They coordinate the activities of the various divisions and delegate authority to subordinate officers, who administer the operation of their own areas of responsibility. Financial institution presidents study financial reports and other data to keep up with changes in the economy that may affect their firm’s policies.

The vice president coordinates many of the operations of the institution. This person is responsible for the activities of a regional bank office, branch bank, and often an administrative bank division or department. As designated by the board of directors, the vice president supervises programs such as installment loan, foreign trade, customer service, trust, and investment. The vice president also prepares studies for management and planning, like workload and budget estimates and activity and analysis reports.

The administrative secretary usually writes directions for supervisory workers that outline and explain policy. The administrative secretary acts, in effect, as an intermediary between minor supervisory workers and the executive officers.

The financial institution treasurer directs the bank’s monetary programs, transactions, and security measures in accordance with banking principles and legislation. Treasurers coordinate program activity and evaluate operating practices to ensure efficient operations. They oversee receipt, disbursement, and expenditure of money, and sign documents approving or affecting monetary transactions. They direct the safekeeping and control of assets and securities and maintain specified legal cash reserves. They review financial and operating statements and present reports and recommendations to bank officials or board committees.

Controllers authorize the use of funds kept by the treasurer. They also supervise the maintenance of accounts and records, and analyze these records so that the directors or other bank officials will know how much the bank is spending for salaries, operating expenses, and other expenses. Controllers often formulate financial policies.

The financial institution manager establishes and maintains relationships with the community. This person’s responsibility is to supervise accounting and reporting functions and to establish operating policies and procedures. The manager directs several activities within the bank. The assets, records, collateral, and securities held by the financial institution are in the manager’s custody. Managers approve loans of various types, such as credit, commercial, real estate, and consumer loans. They also direct personnel in trust activities.

The loan officer and the credit and collection manager both deal with customers who are seeking or have obtained loans or credit. The loan officer specializes in examining and evaluating applications for lines of credit, installment credit, or commercial, real estate, and consumer loans and has the authority to approve them within a specified limit or recommend their approval to the loan committee. To determine the feasibility of granting a loan request, the officer analyzes the applicant’s financial status, credit, and property evaluation. The job may also include handling foreclosure proceedings. Depending on training and experience, officers may analyze potential loan markets to develop prospects for loans. They negotiate the terms of transaction and draw up the requisite documents to buy and sell contracts, loans, or real estate. Credit and collection managers make up collection notices for customers who already have credit. When the bank has difficulty collecting accounts or receives a worthless check, credit and collection managers take steps to correct the situation. Managers must keep records of all credit and collection transactions.

Loan counselors study the records of the account when payments on a loan are overdue and contact the borrower to discuss payment of the loan. They may analyze the borrower’s financial problems and make new arrangements for repayment of the loan. If a loan account is uncollectible, they prepare a report for the bank or institution’s files.

Credit card operations managers are responsible for the overall credit card policies and operations of a bank, commercial establishment, or credit card company. They establish procedures for verifying the information on application forms, determine applicants’ credit worthiness, approve the issuance of credit cards, and set a credit limit on each account. These managers coordinate the work involved with reviewing unpaid balances, collecting delinquent accounts, investigating and preventing fraud, voiding lost or stolen credit cards, keeping records, and exchanging information with the company’s branches and other credit card companies.

The letter of credit negotiator works with clients who hold letters of credit used in international banking. This person contacts foreign banks, suppliers, and other sources to obtain documents needed to authorize the requested loan. Then the negotiator checks to see if the documents have been completed correctly so that the conditions set forth in the letter of credit meet with policy and code requirements. Before authorizing payment, the negotiator verifies the client’s credit rating and may request increasing the collateral or reducing the amount of purchases, amending the contract accordingly. The letter of credit negotiator specifies the method of payment and informs the foreign bank when a loan has gone unpaid for a certain length of time.

The trust officer directs operations concerning the administration of private, corporate, and probate trusts. Officers examine or draft trust agreements to ensure compliance with legal requirements and terms creating trusts. They locate, inventory, and evaluate assets of probated accounts. They also direct realization of assets, liquidation of liabilities, payment of bills, preparation of federal and state tax returns on trust income, and collection of earnings. They represent the institution in trust fund negotiations.

Reserve officers maintain the institution’s reserve funds according to policy and as required by law. They regulate the flow of money through branches, correspondent banks, and the Federal Reserve Bank. They also consolidate financial statements, calculate the legal reserve, and compile statistical and analytical reports of the reserves.

Foreign-exchange traders maintain the balance that the institution has on deposit in foreign banks to ensure its foreign-exchange position and determine the prices at which that exchange will be purchased and sold. Their conclusions are based on an analysis of demand, supply, and the stability of the currency. They establish local rates of exchange based upon money market quotations or the customer’s financial standing. They also buy and sell foreign-exchange drafts and compute the proceeds.

The securities trader performs securities investment and counseling service for the bank and its customers. They study financial background and future trends and advise financial institution officers and customers regarding investments in stocks and bonds. They transmit buy-and-sell orders to a trading desk or broker as directed and recommend purchase, retention, or sale of issues. They compute extensions, commissions, and other charges for billing customers and making payments for securities.

The operations officer is in charge of the internal operations in a department or branch office of a financial institution. This person is responsible for the smooth and efficient operation of a particular area. Duties include interviewing, hiring, and directing the training of employees, as well as supervising their activities, evaluating their performance, and making certain that they comply with established procedures. Operations officers audit accounts, records, and certifications and verify the count of incoming cash. They prepare reports on the activities of the department or branch, control the supply of money for its needs, and perform other managerial tasks of a general nature.

The credit union manager directs the operations of credit unions, which are chartered by the state or federal government to provide savings and loan services to their members. This manager reviews loan applications, arranges automatic payroll deductions for credit union members wishing to make regular savings deposits or loan payments, and assists in collecting delinquent accounts. Managers prepare financial statements, help the government audit credit union records, and supervise bookkeeping and clerical activities. Acting as management representative of the credit union, credit union managers have the power to sign legal documents and checks on behalf of the board of directors. They also oversee control of the credit union’s assets and advise the board on how to invest its funds.

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