SchoolsFirst Federal Credit Union, one of the largest in the nation with more than 400,000 members, will accept IOUs until the end of the month, said Derek Longshore, vice president of marketing. Then the credit union will reevaluate its position month by month before deciding whether to continue.
"We'll be eating up capital when we do that, but we have conservative financial practices and have been able to amass a great deal of capital," Longshore said. "I don't know whether secondary markets are charging fees, but we definitely are not."
Check-cashing companies also are an option, though they are more likely to redeem the IOUs at a discount. Some, like Cash America, said they didn't intend to accept the registered warrants at all.
Nix Check Cashing in Manhattan Beach also will reject the IOUs at its store locations because its correspondent bank, one of the largest operating in Southern California, refuses to accept the scrip, said spokeswoman Laura Oberhelman.
But Nix customers also could go to Nix's parent company, Kinecta Federal Credit Union. Kinecta still welcomes IOU deposits.
"It was important that we continue to do this for our members, especially since we put in certain requirements to mitigate the risk," Oberhelman said.
"They need this, so we wanted to make it available to them so they don't have to go somewhere else."
--
tiffany.hsu@latimes.com
Times staff writer Tom Petruno contributed to this report.
