Wells Fargo controversy deepens as Illinois withdraws funding

US bank Wells Fargo received more bad news on Monday, as it is set to lose a big business partner in the state of Illinois.

The US state's $30bn annual investment in the California-based bank is set to be withdrawn by state treasurer Michael Frerichs after it was fined $185m for creating unauthorised accounts for unknowing customers.

Frerichs announced the news in a press conference on Monday, in which he explained that a hardline needed to be taken with the bank.

"Wells Fargo is a big financial player in Illinois, and I hope to send the message that their unscrupulous practices are not welcomed and will not be tolerated," Frerichs said during the news conference.

The bank fired over 5,000 employees last month as a result of the scandal, but no senior executives lost their jobs.

Committees in the Senate and the House of Representatives grilled CEO John Stumpf about the impact on Wells Fargo customers and staff in the wake of the incident.

The company's government and institutional banking division is unconnected with its retail banking division, and has been operating in the state since 1970.

In a statement, Wells Fargo said that it understands the concerns from the Illinois Treasury.

"We certainly understand the concerns that have been raised," Wells Fargo said in a statement. "We are very sorry and take full responsibility for the incidents in our retail bank. We have already taken important steps, and will continue to do so, to address these issues and rebuild the state’s and city's trust."