Banks play hardball

Several major financial institutions - Citibank, Chase and Wells Fargo among them - joined Bank of America in announcing plans to redeem the state's IOUs. But the cutoff is July 10, which only gives lawmakers and the governor a week to settle the $26.3 billion budget deficit impasse. After that? B of A says there are no plans for an extension - "This is a firm date for us," the bank told the LAT. That puts additional pressure on Sacramento to keep working on a compromise. Banks were far more accommodating in 1992, the last time warrants had to be issued, and that laissez-faire stance might have delayed cutting a deal. California will pay a 3.75 percent interest rate on $3.2 billion of state IOUs being issued this month. The notes will mature Oct. 2. If the IOUs are redeemed early, the state will pay the interest accrued up to that time,