February 13 2026

Does a Risk-Based Formula Fail as a Measure of Financial Soundness?

Does a Risk-Based Formula Fail as a Measure of Financial Soundness?

According to Chip Filson of Callahan & Associates, the answer is yes.  This op ed piece dissects the requirements of a risk-based approach to determining appropriate capital levels and concludes that credit unions are more nuanced than a single risk formula and that applying a single, formulaic approach will distort fundamental business practices. [5/16]