California, the nation's largest issuer of municipal bonds, isbarring Wells Fargo & Co. from underwriting state debt andhandling its banking transactions after the company admitted toopening potentially millions of bogus customer accounts.

The suspension, in effect immediately, will remain in place for12 months. A “permanent severance” will occur if the bank doesn'tchange its practices, State Treasurer John Chiang saidWednesday. The state also won't add to its investments in WellsFargo securities. Chiang already replaced Wells Fargo with LoopCapital for two muni deals totaling about $527 million that will besold next week.

“Wells Fargo's venal abuse of its customers by secretly openingunauthorized, illegal accounts illegally extracted millions ofdollars between 2011 and 2015,” Chiang said in a news conference inSan Francisco. “This behavior cannot be tolerated and must bedenounced publicly in the strongest terms.”