Big banks to stop cashing California IOUs

CNN/Money.com ^ | 7/10/09 | Tami Luhby

[Kartographer]

NEW YORK (CNNMoney.com) -- Californians will have fewer places to redeem IOUs issued by the cash-strapped state after Friday.

At least three major banks, Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500), will stop accepting the IOUs, as they'd previously announced.

More than 60 credit unions, however, will continue to accept the paper.

[Kartographer]

The NEW ballad of Jed Clampett
Come and listen to a story 'bout a man named Jed
Poor oil entrepreneur barely kept his family fed
Then one day he was working for some food,
And up through the crowd come a bumbling fool (Arnold that is, RINO gold, more taxes please)

Well the first thing you know old Jed's taxes are to much to bear,
Kin folk said Jed move away from there!
Said California is no place for you to be
So they loaded up the truck and they moved from Beverly (go’n back to the Hills they are, fish’n holes, country and western stars)

Well now it's time to say goodbye to Jed and all his kin
They would like to thank you folks for kindly dropping in
You're all invited back again to their new locality
To have a heaping helping of their hospitality
(Redneck Hillbillies, is what the press call 'em now, Clingers of bibles and guns and to Obama no bow! Nice folks Y'all come back now, ya hear?)

[joebellis]

very cute! excellent

[norraad]

Why Credit Unions?

[Jeff Head]

You mean to date there are some banks and credit unions that have actually been accepting these worthless fiats? Amazing.

Unless we make our voices heard loudly now, this is coming to the US as a whole under the Obama admin.

TELL BARACK HUSSEIN OBAMA THAT HE IS FULL OF IT!

[FromLori]

Related

http://market-ticker.org/

[Attention Surplus Disorder]

The implications of this are so far reaching, it’s all at once scary, insane, ridiculous, hysterical, criminal, and as Stuart Smalley once said...

[Kartographer]

Spreading the ‘wealth’ (or should I say the grief)maybe?

[OldNavyVet]

I’m with the Navy Federal Credit Union, and hope it’s non-union common sense has them refusing to take the IOUs.

[taxcontrol]

Can businesses pay their taxes with IOU’s? Might be a good way to save some cash.

[Hodar]

If we write a hot-check; don’t we face fine and possibly jail time?

California does the exact same thing, and they are mystified when banks refuse to honor checks that are drawn on insufficient funds. Why can the state write hot checks, without fines, fees and penalties?

[ctdonath2]

My guess: Market share.
Credit unions have a very localized patronage. To not take IOUs is to lose out on the money those IOUs represent - a large fraction of their business. They don’t take the IOUs, they die.
The banks mentioned are big enough to refuse the IOUs with little ill effect. If anything, the IOUs are merely a pesky annoyance they’d rather not have to deal with, so it’s cheaper (and in the long run strategic) to refuse them.

[Honcho]

Can businesses pay their taxes with IOU’s? Might be a good way to save some cash.


I like it.

[Sarajevo]

Why can the state write hot checks, without fines, fees and penalties?

Thay have taxpayers to rape and pillage for thier debts.

/sarc?

[paul51]

Zero should force all banks to accept IOU’s from the state and gov’t. He should also allow all citizen to pay there taxes in IOU’s. That way, everybody pays their taxes in IOU'S (raise them as high as you want, who cares) and the gov’t gets what they want because they can pay the bills and payoffs in IOU’s. It's a win win win and the people can use their cash to buy plasma tv’s, cars and houses, partially financed with IOU’s also. With such easy financing, the prices on real estate will again climb to lofty heights so people can refinance and buy bigger houses, more tv’s and windmills to power their houses and new cars. Everybody prospers in obamaland.

[All Blue State]

Matthew 18:23-35. The institutions mentioned all accepted TARP funds. Now who should they serve? How is this current situation different from the parable of the servant?

[ThisLittleLightofMine]

At least three major banks, Wells Fargo (WFC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500), will stop accepting the IOUs, as they’d previously announced.

____________________________________________________

They took Tarp money guess they will be directed to accept them by the Feds.

[telebob]

"Why Credit Unions?"

Lots of public employees are members of credit unions.

[jacquej]

What will happen to these credit unions if CA can’t pay off the IOUs?

[ctdonath2]

Go under, of course.
Maybe later is preferable to surely now.

[Barney59]

Just got our 2008 refund as an IOU today... payable on 10/02/2009!