SANTA CRUZ — The county is severing ties with two banks involved in municipal bid-rigging scandals, county Treasurer-Tax Collector Fred Keeley announced Thursday.

Keeley said he is removing New York-based JP Morgan Chase and North Carolina-based Bank of America from an approved list of banks handling bond investments for Santa Cruz County. The decision was based on nationwide, multimillion-dollar settlements involving fraud allegations that the two companies negotiated agreements giving them a look at competitors’ bids for handling the investments.

“There seems to be no limit to the greed of some of our nation’s largest banks,” Keeley said in making the announcement. “Whether it has been unjustifiable fees, collateralized debt obligations, betting against their own investment products through the purchase of credit default swaps, or now bid rigging.

“Local, state and federal governments should not be involved with those who have abused the trust of their customers, especially in the case of public agency investments.”

The county uses a variety of banks for financial transactions, and the move does not affect its primary bankers, Bank of the West and Union Bank, which have not been implicated in bid-rigging. Keeley estimated the value of the county’s bond reinvestment transactions at tens of thousands of dollars annually.

When public agencies such as cities, counties, school districts or other taxing agencies borrow money through bond sales, some of the proceeds are reinvested until needed, with investment returns helping offset the cost of borrowing the funds.

In July, JP Morgan paid $211 million to settle state and federal charges that it rigged the process for winning contracts to handle those reinvestment transactions. The state of California was part of the settlement, with state entities receiving $6.7 million.

That followed settlements with Bank of America and Swiss banking giant UBS.

This week, California-based Wells Fargo agreed to pay $37 million to settle its involvement in a federal suit in New York over municipal bid-rigging, with a bank spokesperson blaming Wells Fargo’s involvement on Wachovia, which Wells Fargo acquired in 2009.

Keeley said the county does not have a banking relationship with Wells Fargo. The county has not been involved in any suits involving bid-rigging.