September 26, 2012

Every Cloud has a Silver Lining

Every cloud has a silver lining.  When the real estate bubble burst in late 2007, the collapsing market caused an economic downturn not seen since the Great Depression.  Many banks were negatively impacted by the falling real estate market: some failed.  The banking crisis forced the FDIC to hire skilled loan review specialists, hired initially on a term basis, to handle the burgeoning loan review workload caused by the skyrocketing level of problem banks.  Most of the loan review specialists have significant prior banking experience.  The loan review skills that many loan review specialists bring to the FDIC are very good and they certainly have been a great help to examiners that work along beside them in problem banks.  FDIC management and employees have been given a great opportunity to see how these specialists would fit into the FDIC permanently.

The FDIC did post some permanent mid-career examiners positions during the height of the crisis (2009-10) to bring experienced personnel into the FDIC to help with the increased workload entailed with examining problem banks.  Some loan review specialists were hired permanently as mid-career examiners or as permanent loan review specialists.  However, since the end of 2010, the mid-career program has been largely dormant, and permanent loan review specialist positions have not been offered since 2011.  Now, the FDICís primary hiring avenue has returned to the Pathways program.  Financial Institution Specialists (FIS) and interns are hired through this program.  While this program is generally successful, the new hires, while potentially capable, are generally inexperienced.

Downturns do not last forever.  Already, loan review specialists whose terms expire this year are being informed their terms will not be extended.  The time to offer loan review specialists permanent employment opportunities is short, as many of their terms expire in less than a year.  There are many potentially good examiners already working for the FDIC on a temporary basis.  They have already proven capable of handling one of the most critical areas of the examination process: loan review.  In 2013, the FDIC plans to hire approximately 100 permanent employees nationwide, largely, if not entirely through the Pathways program.  The FDIC should take advantage of the opportunity to hire proven talent.  The FDIC should take away some slots from the Pathway program and offer them to the best loan review specialists who have proven themselves more than worthy of permanent employment the last two to four years.

What can you do?

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