Last week, Bank of America said it would do the state a favor by redeeming IOUs from current customers at full value -- but only until today. Other major banks quickly and begrudgingly followed suit.
Wells Fargo & Co. was "pretty reluctant to accept the warrants in the first place," said spokeswoman Mary Trigg.
The bank also will reject the IOUs starting Saturday, but it will work with customers on a case-by-case basis to manage short-term financial needs, she said.
"We feel the state of California has to be responsible for living within its means," Trigg said. "The banks aren't the solution to the state's budget problems. We're trying to strike a balance between how grave the situation is and the needs of our customers."
Bank of America will try to use existing services and strategies, such as waiving account maintenance fees or clearing overdraft fees, to help customers who depend on state checks, Sheehan said.
Other banks may offer temporary lines of credit or short-term loans, said Beth Mills, a spokeswoman for the California Bankers Assn. Several smaller banks are planning to continue accepting the warrants; others may accept IOUs for some customers but not others.
Still, some say the banks are stranding their customers in desperate times. Lockyer's office intends to call banks that have set a cutoff for today and urge them to continue cashing the scrip.
"We would urge financial institutions to do right by their customers," Chiang spokeswoman Jordan said. "Private businesses and citizens are receiving these IOUs through no fault of their own, so why penalize them further?"
At least 60 California credit unions have agreed to accept IOUs, according to the California Credit Union League trade group. Most will not set a deadline to deposit the IOUs, and all will redeem the registered warrants at face value, said league spokesman Henry Kertman.
Though some of the member-owned credit unions may decide to redeem IOUs only for current account holders, many others hope to grab some market share from banks no longer honoring the IOUs, Kertman said.
"Some are looking at the situation as an opportunity to differentiate themselves and open their doors to more consumers," he said.
One advantage for many credit unions, which mostly avoided the risky loans that burdened banks, is that they can afford to sit on the IOUs until the state pays them off.
