Continued overall economic growth in the U.S. will drive long-term asset growth as well, although long-term funds will not grow as fast as short term funds will, Schenk said. Continued demand for U.S Treasury bonds as a safe investment for foreign governments may slow, but it will not result in a significant decline in investor interest.

"We believe long rates will continue to drift up," Schenk said. "The countervailing influence in the bond market is that there is tremendous uncertainty internationally in the Eurozone and among developing economies that are slowing down, and I am thinking of China and India in particular."

Schenk cited past Treasury rate performance in his prediction of a rise in those rates. Improvement in U.S. markets will become a little more obvious to investors, which will help drive rates upward.

"The 10-year treasury averaged 2.54% in 2014," Schenk said. "At the moment it's sitting at 1.87%. We believe it will go up to 2.50% by mid-year and 2.75% in the fourth quarter. In 2016, it will average 3.25%."

Schenk described the Fed fund rate as a proxy for credit union funding costs, rising from 10 basis points today to an estimated 2% by year-end 2016. By comparison, the U.S. Treasury rate can be seen as a proxy for asset yields in a baseline forecast that's likely to increase by 140 basis points over the entire forecast horizon, he added.

"All else being equal, funding costs are likely to rise faster than asset yields," Schenk predicted. "That's the rate side of the equation."

Schenk also predicted that unemployment rates will drop to 4.8%, a level that will increase consumer confidence and produce wages likely to rise faster than inflation. In the end, people will spend more money and be more likely to borrow for big-ticket purchases, he added.

"On the other side of the equation we have a mixed–related effect, with the demand for credit unions loans accelerating throughout 2015," Schenk explained. "Loans grew by 10.2% in 2014 and we expect 11% growth in 2015 and 10% again in 2016. Assets now put in "shortish-term" investments yielding close to 0% will be transferred into loans of various kinds and much higher-yielding assets."

Read more: The rising rates will directly impact credit unions' cost of funds…

The rising rates will have a distinct impact on credit unions' cost of funds, Schenk agreed. Despite that, net interest margins will likely hold steady, remaining relatively stable throughout the rising-rate environment, he added.

But there will be pressure on those net interest margins, the economist predicted. Credit unions that earned an average of 80 basis points in 2014 can reasonably expect to retain the rate in 2015 and 2016.

"In the scheme of things, that's a pretty healthy interest rate," Schenk said. "Long- term earnings will average 90 basis points, and that a good rate. During the recovery, earnings rates were substantially lower than that."

The net result of all this activity will be a fundamental shift in the structure of credit union balance sheets as they move from investments to loans. Schenk predicted that balance sheets will see relatively slow growth as credit unions will remain cautious and not raise deposit rates quite as fast as the rise in Fed fund rates. Outflows will likely cap balance sheet growth, he added, and savings account balances, which grew 4.5% in 2014, will slow 4% in 2015 and 3% in 2016.

"Savings growth will be relatively weak because money market yields will be going up quickly," Schenk said. "Credit unions have a lot of money parked in savings accounts waiting for the Fed to move and for money market rates to increase above savings account yield. Funds outflow will constrain balance sheet growth."

In the face of increased loan demand and savings runoffs, Schenk suggested that credit unions keep a close eye on interest rate risk in order to prepare for the rising rate environment. The CUNA economist also stressed the need for adequate liquidity that will enable credit unions to take full advantage of the new prosperity that a higher-rate environment will offer financial institutions of all types.

"Be in position to meet the loan demand that will continue through this forecast horizon," Schenk said. "Differentiate your institution, differentiate the value you bring your members and community, and insure that the people you serve recognize the transformative power of cooperatives."

Credit unions also will benefit from continued membership growth throughout the next two years. Aggregate U.S. membership grew by 3% in 2014, crossing the 100- million-member threshold in June. Schenk predicts another 3% membership growth in 2015 and 3% more in 2016.

Overall, credit union growth is three times the rate of U.S. population growth, Schenk said. Coupled with increasing consumer confidence, those numbers mean continued increases in borrowing and greater financial stability for the majority of credit unions nationwide.

"Consumers and members have the willingness and ability to engage financially in more obvious ways going forward," Schenk said. "I think we have the best of times ahead of us."