Credit Union Deductions
Each pay period, state employees may authorize deductions from their salary or wage payment for a payment to a participating credit union.
To participate, a credit union must:
- Submit forms to the Comptroller’s office agreeing to the provisions of Administrative Rule 5.47.
- Develop an authorization form that complies with the Comptroller’s rules.
View the list of approved participating credit unions (login required).
An employee may authorize up to three deductions per month, but no more than one deduction may be made to a particular credit union.
An employee authorizes a deduction to a credit union by:
- Completing an authorization form provided by the credit union and returning it to the credit union.
- Submitting a properly completed electronic authorization through CAPPS.
The credit union will forward completed authorization forms it receives to the employing state agency.
The employing state agency must process the authorization and establish the deduction no later than the first workday of the second month following the month when the agency receives the notification.
The agency receives the authorization form on March 5. The deduction must be in effect for the payroll the employee will receive on the first workday of May.
State agencies receiving an authorization form that does not appear to follow the Comptroller-approved format should contact Payroll Policy at (512) 475-5615 or email@example.com.
CAPPS agencies can contact the CAPPS authorized support staff help desk at (512) 463-2277.
Note: Neither the Comptroller’s office nor any other state agency is liable for any damages or other consequences resulting from a state employee authorizing an incorrect amount for a deduction.
Deduction Change, Cancellation, Enrollment on Transfer and Refunds
Change requests and cancellations
An employee may change or cancel a deduction for a payment to a participating credit union at any time by completing a revised authorization form or by submitting an electronic authorization through CAPPS.
For changes or cancellations on a revised authorization form:
- A change request must be submitted by the employee to the participating credit union. The credit union must then submit the request to the employing state agency.
- A cancellation may be submitted to the credit union or the employing state agency.
For changes or cancellations submitted via electronic authorization through CAPPS, the employing state agency must notify the participating credit union in writing when it submits the next monthly detail report to the credit union.
State agencies must complete the employee’s change or cancellation request no later than the first workday of the second month following the month when the agency receives the notification.
When an employee transfers between state agencies, the employee must complete a new authorization form or electronic authorization through CAPPS at the new agency to participate in the credit union deduction. The authorization does not transfer from the prior agency.
Agencies may receive refunds from the credit union for an employee’s account only if an amount more than the elected amount was deducted. Agencies may deduct the amount of the refund from the subsequent payment to the credit union or request in writing to receive a check for the amount of the refund.
Wages to Support Deductions
State employees are solely responsible for ensuring that salary or wages are sufficient to support a deduction. If a state employee's salary or wages support only part of a deduction, then none of the deduction may be taken.
If there is more than one deduction and the employee’s salary or wages do not support all of the deductions, then none of the deductions may be taken.
If an employee’s salary payment is cancelled or reduced after the credit union has received but not distributed the funds, the credit union must return the funds to the agency. If the funds have been distributed, the credit union must take whatever steps are legally available to collect the over-deducted funds.
Payments to Credit Unions by the Comptroller’s Office or Institutions of Higher Education
The Comptroller’s office is required to pay deducted amounts to participating credit unions by electronic funds transfer (EFT) or warrant (check). If an institution of higher education’s employee salary and wages are not paid directly to the employee by the Comptroller’s office, the institution must pay the employee’s deducted amount to participating credit unions by EFT or check.
The deduction payment must be delivered to the credit union no later than the third workday after the date printed on the check. Regardless of how the funds are received, EFT or check, the credit union must then distribute the funds to the employee’s account.
State agencies must submit a monthly detail report to each participating credit union they send deductions to on behalf of their employees. The credit unions use the reports to deposit deducted amounts to individual employee accounts. The monthly detail report may cover only the deductions from salary or wages paid on the first workday of the month.
For payrolls paid other than the first workday of the month, state agencies must submit an additional detail report to participating credit unions.
Detail reports must include:
- Name and Social Security number of each state employee who had a salary deduction made for payment to a credit union for that month.
- Deduction amount for each employee.
The agency must deliver the report no later than the third workday after the deducted amounts are paid to the credit union.
Credit unions must report any discrepancies between the detail report and the actual deductions received no later than the 60th day after the detail report was mailed.
Report to an entity other than the participating credit union
If a participating credit union has notified the Comptroller’s office in writing that the report should be submitted to an entity other than the participating credit union, the report must be submitted to that entity. See the list of approved participating credit unions (login required) to determine if a report should be submitted to an entity other than the participating credit union.
Canceled Payments of Salary or Wages
State agencies must notify a participating credit union in writing when the agency cancels a payment of salary or wages to a state employee no later than the day the agency processes the cancellation. The credit union may not distribute the deducted amounts to the employee’s account if the credit union receives the notice before the distribution occurs.
If the credit union receives the notice after distributing the deducted amounts, the credit union must withdraw the deducted amounts from the employee’s account, unless the credit union determines the withdrawal would violate federal or state law or the amount of funds in the account is insufficient for withdrawal of the full amount.
If the withdrawal is not allowed under the preceding criteria, the agency that employs the employee must collect the amount of the distribution directly from the employee.
The credit union must notify the employing state agency about whether or not the deducted amounts have been distributed to the employee’s account. If the distribution has occurred, the credit union must also notify the agency about whether the credit union has withdrawn the deducted amounts from the employee’s account. These notifications must be in writing.
For an employee whose salary and wages are paid through a warrant issued or an electronic funds transfer initiated by the Comptroller’s office, the Comptroller’s office may not charge the employee an administrative fee to cover the cost of making the deduction.
If a state employee’s salary or wages are paid through a check issued or an electronic funds transfer initiated by an institution of higher education, and the institution’s payroll costs are reimbursed from the state treasury, the institution may determine whether the employee must pay an administrative fee to cover the cost of making the deduction.
If an institution withholds a fee from the employee, it must periodically recalculate the fee to ensure it equals the cost of making the deduction. Each employee participating in credit union deduction, and participating credit unions with employee deductions, must be notified whenever the fee is recalculated. The amount of the fee may not exceed the lesser of:
- The actual administrative cost of making the deduction.
- The highest fee charged by the institution for making another similar deduction.
Texas Government Code, Sections 659.101, 659.103(a), 659.106-659.108; 34 Texas Administrative Code Section 5.47(a)(3), (6)-(8), (10), (12)-(18), (b)(2)(A)-(D), (3), (5), (c)(1), (e)(1)-(2), (g), (i)-(l).