The financial condition of members didn't fare any better, with CEOs feeling less confident that members' financial conditions are improving now (7.43) or will in six months (2.93). And CEOs are concerned about credit union balance sheets, too, though they score drastically higher than member financial condition. CEOs applied a 42.12 rating to current financial condition but rated a less confident 35.36 regarding possible conditions six months down the road.

"With all the attention on subprime mortgages, the resultant credit market meltdown and higher energy costs, it shouldn't be too surprising that both credit union members and CEOs are wary," said Brian Turner, manager of Southwest's Investment Advisory Service.

"Whereas credit union loan growth is cyclically challenged during the first quarter of each year, the current economic climate certainly is not helping. Members are carrying rather high debt loads and as long as the economy appears weak, they will be more comfortable just maintaining what they have–no new car and no new home for the time being."

Turner was a bit more positive than the report, saying he thinks mortgage lending will pick up this summer in some regions, and industrywide, auto loans could reach a 5% annualized gain.

"From September 2007 through March 2008, the [Mortgage Bankers Association] mortgage refinancing index is 42% higher than the previous nine months and is averaging 78% higher first-quarter 2008 than for all of 2007. Fixed-rate mortgage rates have actually risen about 15 basis points since this time last year," Turner said.

CEOs are expressing uncertainty regarding what to do with an expected increase in deposits, though.

"Because members may have lower disposable income, credit unions don't know how long to hold some of those shares. They also fear narrower net margins, as the cost of liquidity has risen greatly in response to the FOMC lowering their overnight target rate to 2.25% and to the continued growth of share certificate issuances."

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