It’s being reported that some major banks are now beginning to draw the line with California’s teenager-like spending habits, saying they are going to stop accepting state IOUs after Friday as the California state government remains stuck in a budget impasse.

Can’t say I blame them.  They have a business to run and their customers to protect.  But some groups are now starting to demand that the federal government force these banks – private businesses – into playing along with yet another phantom-money shell game, and there’s even talk of creating a “market” for selling or trading the California IOUs.  All because the banks were previously bailed out by the feds.

But perhaps having learned their lesson about good credit risks versus bad credit risks with the mortgage meltdown, the banks aren’t the bad guys this time.  Perhaps – unlike Barney Frank, who’s now asking Fannie Mae and Freddie Mac to “relax” rules the purchase of condominiums – they’ve figured out that loaning money to those who can’t pay it back doesn’t make good business sense. 

California created this mess so let California clean it up.

Vendors and contractors holding IOUs could potentially use them to pay state taxes, fees and liens under a bill passed by a [California] state Assembly committee Tuesday. The bill would require the state to accept its own IOUs in lieu of money owed the government.