Banks draw line over accepting Calif. IOUs

[RamboLiberal]

Source: MSNBC/AP

NEW YORK - After taking multibillion-dollar bailouts from the federal government, some of the nation's biggest banks are declining to lend a hand with a different financial mess: the California budget stalemate.

The banks, including JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. and some regional banks, are trying to pressure lawmakers to end the impasse by warning that, after Friday, they won't accept IOUs issued by the state. The move would leave many businesses and families with pieces of paper and fewer options for getting their money immediately.

Government officials and consumer advocates say the banks should be more sympathetic, especially since they've been the direct beneficiaries of taxpayer dollars.

"If they hold to that stance, then there's potential for hardship being suffered by the recipients of IOUs," said Tom Dresslar, spokesman in the California Treasurer's office.

Read more: http://www.msnbc.msn.com/id/31804471/ns/business-us_business/

[Javaman]

1. Whoops! I guess the govenator didn't count on banks not believing his bullshit. nt

[snappyturtle]

2. Well, is anyone shocked? These same banks that have screwed

us over with credit cards deviousness and derivatives plus put us into debt for the rest of our lives are just being true to the only entity important.....themselves. imho

[No Elephants]

3. No limit to the ways in which the little "guy" gets screwn.

[izquierdista]

4. The nice thing about being "the state"

Is that the state makes the rules. Don't want to accept California IOUs? Then maybe the state can suspend your business license, dissolve your charter, vacate any judgments you own, and summarily dismiss any court cases you have pending. Without the state to enforce laws, articles and by-laws are just goddamn pieces of paper.

[billyoc]

5. Of course. The banks are evil, not stupid.

Why would they accept worthless IOU's?

CA residents can use the IOU's to pay their state taxes, meaning that the state won't get any tax revenue next year because they're collectiong their own IOU's!

I would consider any bank to be criminally negligent if they accepted them.

[Sen. Walter Sobchak]

6. they would have to be insane to accept this pre-used toilet paper

Given the odds California will be able to pay these out come October is practically zero.

[Citizen Worker]

7. CA is now ripe and ready for harvest

CA is ripe for the "shock doctrine." Watch for the wholesale sell off of state, read that taxpayers, assets. Parks, schools, highways oh the highways and tolls, libraries, etc. It's just the beginning of the "shock doctrine."

[ProgressiveProfessor]

8. CA is also implementing rules on documenation required for 3rd party redemption that make it damn

near impossible for banks to handle the IOUs.

[KamaAina]

10. I just had a nightmarish vision of payday loan-type joints springing up across the state

to take them at 50% of face value or whatever. Guess the documentation rules would apply to them, too.

[ProgressiveProfessor]

11. IIRC it requires a notarized signature from the original issuee

to be kept with the warrant.

[Gman2]

9. Ahnold should NOT be able to just strip the safety net for Grover!

To spur the Obama to intervene. In that period, folks WILL DIE! I. The plan to give back every red cent that taxpayers give in excess, leaves nothing for a rainy day. And that is the plan. Give back when people are feelin fine. Then, when things are screwed, you use it as the thing you have been waiting for. Shock Doctrine.

[JDPriestly]

12. According to Randi Rhodes, most of the stimulus money has not been spent,

in part because some states/governors have refused the money altogether or are delaying in approving its expenditure. Why can't Congress just vote to give any money refused by any other state to California. We will gladly take it. There may be other states who are willing to take money refused by other states.

[marketcrazy1]

14. the truth is

most of the stimulus money was never meant to be spent this year...............

[xchrom]

13. prop 13 and the whole intiative process is a big part of the blame.

the rest is ahnuld -- and nutso republicans.