The Household Survey put unemployment at 4.4%, increasing concerns over wage pressures given hourly earnings were up 0.3% to $17.22. However, NAFCU is not expecting this to last and that unemployment will rise to 5% by year-end.

"The economy is going through 'soft' patches and making adjustments. As long as there is no significant tightening in the labor market (increasing wage pressures), the FOMC is expected to remain on hold this year," Wai explained.

Separately on consumer credit, he noted that most of the gain in consumer credit (seasonally adjusted) in February was in revolving credit (3.4%). "The decline in housing prices, which subsequently affects home equity withdrawals, coupled with higher energy prices, will encourage greater usage of revolving credit in the near term, " he wrote.

In total, credit union consumer lending declined to $234.7 billion in February from $236.2 billion the previous month (non-seasonally adjusted). Non-revolving credit union consumer lending shrank $1.1 million to $206.5 billion, while revolving credit fell from $28.5 billion to $28.2 billion. However, credit unions' market share remained stable at 9.73%.

Wai expects total consumer installment credit to grow by 4.0% in 2007.

"Usually what happens when you have a slow down," he concluded, "it affects your savings component. Credit unions are having difficulty attracting the savings side. Then usually later on, the ability to repay question comes in, then you have delinquencies and charge offs. But, right now, as it stands, credit unions are very healthy in their loan portfolio. They have very low charge offs and delinquencies." Bankruptcy Filings

Bankruptcy filings among credit unions' members were increasing gradually over the last year since the new bankruptcy reform legislation went into effect Oct. 17, 2005. Data from Callahan & Associates show that the value of the credit union loans charged off due to bankruptcy declined the first three quarters of 2006, there was a slight up tick in the fourth quarter, which the firm said is typical as credit unions clean up their books at year-end. Bankruptcies as a percentage of net charge offs dropped throughout 2006 from 32.19% in the first quarter to 17.13% in the fourth quarter.

However, the number of members filing for bankruptcy is increasing after a large drop between the first and second quarters from 34,908 to 22,254, the last quarter was back up to 32,886. Callahan's had not gotten back as of press time on possible reasons behind the significant drop and increase.

No credit union specific data was available for first quarter 2007 because NCUA is still collecting and analyzing the data. "If you look at the overall delinquencies and charge offs, they have not really risen very much," NAFCU's Wai said. He added that loss allowances have dropped which has given credit union return on average assets a decent boost.

However, one Web site dedicated to credit cards reported a huge increase and general statistics back it up. Cardweb.com was reporting for the first quarter "a nearly 60% increase over a year ago period. Momentum exploded in March rising more than 30% over the prior month." There were 185,000 filings in the first quarter, it said.

Lundquist Consulting, a financial services statistical company, provided similar data with 50,494 bankruptcy filings in January 2007 up to 55,436 in February then a spike to 73,882 for March for a grand total of 179,812.

The credit union trade associations lobbied hard for about a decade to pass the Bankruptcy Abuse Prevention and Consumer Protection Act, which became effective Oct. 17, 2005. A rush to file occurred just prior to that effective date with a steep drop off following it. The law aimed to push more bankruptcy filers who could repay some or all of their debts to do so, according to CUNA and NAFCU. –[email protected]