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Wells Fargo and Bank of America will take state IOUs from customers

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Wells Fargo and Bank of America said today they would resume allowing customers to deposit California IOUs, which both banks had stopped accepting in early July.

State Treasurer Bill Lockyer will begin redeeming the IOUs on Friday, but holders of the scrip either must cash them in person at Lockyer’s office in Sacramento or by mail.

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Depositing IOUs at the bank would be easier for many people and businesses.

Wells Fargo said it would allow customers to deposit the IOUs starting Friday; BofA said it would begin taking the scrip for deposit Sept. 9.

Both banks said they would credit interest owed on the IOUs to customers’ accounts within 30 days, although Wells said it won’t credit interest that comes to less than $5. The IOUs are accruing interest at a 3.75% annualized tax-free rate through Friday.

Some smaller banks and credit unions have been accepting the scrip from customers all along, but Wells and BofA balked, which left many recipients stuck with the paper (officially known as registered warrants).

California was forced to issue IOUs to many creditors when it ran short of cash beginning in July. Through Monday the state had issued 457,238 IOUs with a total value of $2.37 billion.

-- Tom Petruno

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