North Dakota-based Midwest Corporate has shut its doors, choosing to liquidate rather than attempt to meet toughened NCUA financial yardsticks. The closure was widely anticipated, as many of the corporate’s members had shifted their correspondent services to ProDraft Services, a Bismarck ND CUSO helmed by Doug Wolf, the former CEO of Midwest Corporate.
Midwest Corporate’s slide into extinction had begun when it lost some $13 million in capital in the failure of U.S. Central, suggested Wolf, who said closure allows Midwest to return whatever capital remains to members, which then are free to take their business elsewhere.
Technically, however, Midwest Corporate still exists if barely. Reports NCUA’s assistant director of public affairs, David Small, “All members of Midwest have essentially left the charter. However, the charter will remain active until the final residual payout is made upon liquidating remaining assets. This may not occur until late summer.”
Midwest Corporate’s fate may be a preview of coming attractions, say some experts. Credit union consultant Marvin Umholtz indicated he expected more corporate credit unions to shutter in the months ahead. Umholtz elaborated: “So far no one has conclusively demonstrated that the NCUA-mandated limited business model for corporate credit unions will work going forward. It would not surprise me if more corporate credit unions' member credit unions decided to liquidate the institutions and look to another corporate credit union or alternative service provider.”