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News Now

CU System
Calif. CUs bask in good publicity on IOUs
SAN DIEGO (7/21/09)--Credit unions in California continued to bask in positive publicity after more than 80 credit unions agreed to accept the state's registered warrants, or IOUs, stemming from the stalemate on the state's budget. Banks still are garnering negative publicity for not accepting the checks. The latest article on the topic is in the San Diego Business Journal (July 20) and entitled "Banks Tell State to Keep Its IOUs; Credit Unions Rejoice." It outlines why the banks are receiving negative publicity--many wouldn't accept the IOUs and larger banks put a July 10 deadline on their acceptance, in an effort to force the legislature to a budget agreement. The resulting brouhaha over that decision prompted Citibank to extend its deadline to July 17. "It's a far different story with the state's credit unions, which have mostly accepted the warrants," said the article. California Coast CU, a $1.8 billion asset credit union based in San Diego, told the publication that so far, it had cashed 25 IOUs ranging from $12 to $3,000. The credit unions are using the fact that they're taking the IOUs to differentiate themselves from banks, said the article. Henry Kertman, spokesman for the California and Nevada Credit Union Leagues, noted that credit unions also cashed in similar warrants in 1992, the last time the state issued them. They were simply serving their members in a time of need. "It's just part of the credit union mission," Kertman told the publication, noting that credit unions have many members who are state workers, who are unemployed or who have been laid off, "and we're here to help them." Late last night, The New York Times reported that California broke its budget stalemate as lawmakers worked out an agreement with Gov. Arnold Schwarzenegger to close a $26 billion budget gap.
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