NY Faces Pay Gap Challenges in Bolstering Bank Examination Staff

New York’s top financial industry regulator is trying to expand bank examiner staffing, but relatively low pay and federal agencies’ competition for skilled labor are posing stiff challenges.

The New York Department of Financial Services has faced “internal staffing restraints” that hinder adequate staffing of examination teams, the DFS said in an April report on the failure of Signature Bank.

The department’s staffing shortages, which have been chronic since the agency was created in 2011, are typical of both state and federal bank regulators, particularly in high-cost states such as New York. But state regulators with limited budgets face even ...