SACRAMENTO, Calif. – JPMorgan Chase & Co. has agreed to loan the state of California $1.5 billion so the state can bring its “IOU” program to a close a month earlier than planned.
The state’s treasurer’s office had been seeking a lender to provide the funds in the face of a large budget shortfall. California has been issuing the registered warrants, better known as IOUs, for several months to private businesses, local governments, taxpayers receiving income tax refunds and owners of unclaimed property. While many California banks have declined to accept the warrants, more than two-dozen credit unions have been doing so.
By coincidence, the bank’s namesake, J.P. Morgan, in 1895 came to the rescue of the Federal Treasury by providing $65 million in gold to help to float a bond issue that restored the treasury surplus.
