Wolf, still working at the Bismarck, N.D.-based corporate on a contractual basis, said members were averse to recapitalization because Midwest Corporate has historically required less capital than its peers. As a result, the NCUA's new capital requirements or a merger would require significant capital from members. Musland agreed that members generally oppose recapitalization, including contributing capital required to join another corporate.

Midwest Corporate began meeting with members to discuss the cooperative's future last summer, after the NCUA seized U.S. Central FCU in March 2009 and regulators told member corporates shortly thereafter they would lose all contributed capital, Wolf said.

"I was telling other corporate CEOs I don't agree with waiting to see what the new regs will be, we need to communicate with members now," he said.

Members were initially supportive of the corporate, and last year, Midwest Corporate began making plans to recapitalize the institution. However, Wolf said after the NCUA's proposed corporate regulations were released, the corporate's board and management team revisited all possible options and developed the three options for members that included the option to transition services to ProDraft, which was hastily formed in 2008 to provide such a plan B.

By April, Midwest Corporate's board recommended the transition to ProDraft and eventual liquidation, Wolf said, and members agreed.

"We have been proceeding on that track ever since," he said.

A test group of members is currently transitioning their correspondent services to the Midwest Corp-owned ProDraft. Others are expected to follow later this year, Wolf said.

Musland said he thinks the majority of members will transition to ProDraft.

"Like any credit union making a business decision, they will do their due diligence and check other options," Musland said. "If they can find cheaper price, they'll probably take it. But, for now, it looks like a lot of members will jump on the ProDraft option."

Musland also said his board and management team are currently shoring up the legalities of separating the CUSO from the corporate once investments have matured. However, he cautioned that complete liquidation of Midwest Corp wouldn't happen for at least three years. A vote by members to liquidate isn't likely to occur until next year's board meeting in April, he said.

Wolf had said previously that liquidation could begin as early as 18 months from now. However, he cited the same road block as Musland: investments that must first mature.

"We don't have the issues that the larger corporates have with problem legacy assets," Wolf said. However, Midwest Corporate does have some investments remaining at U.S. Central, he said, that would likely be assessed penalties if they were sold or withdrawn prematurely.

Both men said members should only experience two service changes: They will have to find a new source for investments, and may see a reduction in their liquidity credit lines. ProDraft negotiated with Fifth Third Bank to provide the services, Wolf said.

"It was the same idea as a corporate, we pooled together to negotiate the best pricing," Wolf said. "We were very explicit to the bank: If they don't hold to their prices, we will pick up and move as a group. We can, because there's no capital investment."

Midwest Corporate had nearly $7 million in member shares and $8 million in retained earnings as of September 2008. According to the NCUA's April 5310 reports, less than $1 million in total capital remains.

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