The Bank of New York Mellon will continue to hold South Carolina's more than $40 billion in assets.
State Treasurer Curtis Loftis announced Tuesday the state has signed an updated custody agreement with the bank, which has been the state's bank for more than 30 years.
South Carolina and the bank have had a rocky relationship of late, as the state sued the bank in 2011 alleging the bank lost $200 million of the state's money because it purchased debt from Lehman Brothers, a financial services firm that collapsed during the 2008 financial crisis. That lawsuit settled last year.
Loftis had asked for proposals from other banks. But after a review of bids by the Treasurer's Office, the Retirement System Investment Commission, and the Public Employee Benefit Authority, the state decided to seek another agreement with the Bank of New York Mellon.
“We took personalities and politics out of the decision-making process as we looked for a custody agreement for more than $40 billion dollars of the state’s assets," Loftis said in a news release. "I am pleased that we have signed an improved agreement with Bank of New York Mellon."
According to the treasurer's office, the updated agreement includes:
- To increase transparency, fees will be invoiced and paid directly from the applicable Funds.
- State Funds and Trust Funds will get a larger share of securities lending revenue
- The Bank accepts more responsibility for reporting and accounting for assets not currently in-bank
- Additional confidentiality provision
- Comprehensive menu of ancillary services are made available to the Trust Funds
- New custody contract supports the global and diverse nature of the Trust Funds
- Increased staff training, valued at $150,000 a year