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TexPayment Resource

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Introduction to Direct Deposit
Prohibition on International Payments

The Comptroller’s office does not participate in International ACH Transactions (IATs). Direct deposit payments are restricted to domestic financial institutions.

IAT requirements are established by the federal agency Office of Foreign Assets Control (OFAC) and the National Automated Clearing House Association (NACHA) which administers the rules and guidelines for electronic payments.

According to the Prohibition on Direct Deposit to Financial Institutions Outside the United States, agencies are responsible for guarding against direct deposit payments they issue through U.S. financial institutions being transferred to financial institutions outside the United States.

Each paying agency must practice due diligence to determine the ultimate destination of payments issued by direct deposit:

State payees who receive payments through the Comptroller’s office should contact their paying agency  to discuss the following direct deposit options:

  • The paying agency must provide its payees the Comptroller’s Direct Deposit Authorization form (74-176) or its approved internal authorization form. The ACH (Direct Deposit) Payment Destination Confirmation form (74-227) may be required if the applicant indicates its state payments will be forwarded to a financial institution outside the U.S.
    • If the applicant certifies on form 74-227 that less than 100% of its state payment will be forwarded to a country outside the United States, the applicant may be set up for direct deposit.
    • If the applicant certifies on form 74-227 that 100% of its state payment will be forwarded outside the United States, the applicant’s direct deposit request will be denied and direct deposit instructions must not be set up.
  • The Comptroller’s office offers state agencies the option to participate in the state’s pay card program available to their state employees and state retirees.
    • It is at each agency’s discretion whether it will participate in the state’s pay card program. See Pay Card for more information.
    • The current pay card program includes a percentage fee for international transactions and a fee for foreign ATM transactions, which may change based on the state’s pay card contract. Exchange rates are also a factor when using the pay card in a foreign country.

For a helpful introduction to this requirement, see the IAT and TINS IAT Indicator Tutorial.