Will Banks Honor IOUs?

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(Sacramento, CA)
Wednesday, July 1, 2009

Officials with Bank of America and Wells Fargo say they want more details before making a decision.

A state board is expected to announce the interest rate on the IOUs…or registered warrants…Thursday. 

Meanwhile, Beth Mills with the California Bankers Association says she expects some banks to accept them…and others to decline. 

“I would encourage anybody who gets one of these warrants to go in and talk to their bank since there may be other alternatives that a bank can explore with their customers to try and help them. Possible an extension on a line of credit or some sort of loan arrangement." 

One banking institution that’s already announced it’ll honor the IOUs is the Sacramento-based Golden One Credit Union. 

The last time the state issued IOUs was during a long budget fight in the summer of 1992.