California Hands out First Batch of IOUs
July 5, 2009 by Mark Ellis
Filed under Business
California residents still waiting for their income tax returns may have already received their IOU as the debt-ridden state scrambles to get 29,000 IOUs, worth more than $53 million in total, into the hands of those owed. So far, California has been unable to negotiate any solution to even begin to solve the state’s massive budget deficit.
The IOUs will be issued at a 3.75 percent interest rate and residents will be able to take them to cooperating banks to receive their money. Not every Californian financial institution will accept the IOUs, but major banks like Bank of America and Wells Fargo have decided to accept the vouchers until July 10.
According to a statement from Wells Fargo, though, the bank is certainly “reluctant” to start accepting the IOUs, but they have strongly encouraged California officials to do everything they can to get the budget issues settled. Several banks around California, mostly the smaller banks, have yet to decide whether or not they will accept the IOUs.
Image: Flickr
