Wells Fargo, BofA to Accept California IOUs

Wells Fargo and Bank of America said on Wednesday that they will begin accepting IOUs from the state of California within a week.
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Updated from Wednesday, Sept. 2

NEW YORK (

TheStreet

) --

Wells Fargo

(WFC) - Get Report

and

Bank of America

(BAC) - Get Report

said on Wednesday that they will begin accepting IOUs from the state of California within a week.

California was forced to issue the IOUs, or registered warrants, in July because a budget crisis has prevented the state from paying interest on its municipal bonds.

Banks had first refused to get behind the notion of delayed payouts, but once California said it would start redeeming the warrants earlier than anticipated, they began to comply.

Wells will start accept IOUs on Friday and BofA will accept them starting next Wednesday.

Citigroup

(C) - Get Report

,

JPMorgan Chase

(JPM) - Get Report

and an assortment of other big lenders also have exposure to California debt.

Shares of Wells closed Wednesday at $26.09, down 12 cents. BofA shares fell 19 cents to close at $16.27.

-- Written by Lauren Tara LaCapra in New York

.