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So far, no lawsuits have been threatened over the latest round of IOUs. The latest IOUs, called individual registered warrants, will be redeemable with interest in October by banks, individuals or anyone who still has them. The interest rate was set at 3.75 percent. Bank of America will stop accepting IOUs after July 10 but will try to assist those customers in other ways, perhaps by waiving fees or making other arrangements on payments, bank officials said. Wells Fargo and Chase didn't elaborate on their plans for IOUs after July 10. The California crisis came as lawmakers in several other states wrestled with recession-wracked budgets. In Illinois, the legislative session ended with no plan for paying state employees or delivering services. In Pennsylvania, the governor is proposing a 16 percent tax increase. Though the crisis has been coming for a while, some cannot believe California has gotten itself to this point. "Twenty-four billion dollars -- that's just a number I can't even wrap my mind around," said Lynn Merritt, whose small business provides office supplies to several state agencies. Getting IOUs for payment "would be terrible as a business person, and it would put me in a really bad bind," she said, "but they can't just keep going like they are."
___ On the Net: California State Controller's Office,
http://www.sco.ca.gov/
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