Bank number

May 1911 Key to Numerical System of the American Bankers' Association, upper left side of page 72, showing usage of the term "bank number" at the time.

A bank number is a bank code used to identify a bank for electronic purposes in the United States. Bank numbers such as Bank Identifier Code (BIC), Bank Identification Number (BIN), and Routing transit number (RTN) categorizes a bank for machine-aided sorting of checks and so forth. The term is used in some deposit-slip instructions such as "List checks separately by bank number."

In the U.S.A. the first part stands for an area and the second part for a bank in that area. In the first half of the 20th century the area was either a major city or one of the 50 United States of America. After about 1950 the area was a central bank location. The old numbers were like 3-1, the new numbers were like 0310-0001 with hyphen now only implied. A ninth check digit was added to the end of the newer bank numbers. Since the 1950s a transitional form like 3-1/310 has also been printed on checks.

Some sample deposit slips say "List checks singly" with checks listed only by their amounts.^{[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18]}

Number vs. fraction

Washington, DC, bank number 3 on 1918 check.

Washington, DC, bank number 3 on 1954 check.

The bank number is in the clearing-bank code at the bottom edge of the check. The code contains the check routing and funds availability and transit number and bank identifier. The first two numbers tell the reserve bank, the second two tell its branch and check-clearing information, the next four is the paying bank's number, and the ninth digit is for error control. The numbers at the bottom edge of the check were invented in the 1950s and automated the check payment process.^[19] The clearing-bank code is also called the routing/transit number and is similar to the fractional routing/transit number also on the check. In the fraction, the institution identifier is part of the numerator. The check's bank is after the first hyphen in the numerator and its federal bank is in the denominator. Often people write "bank over fed bank" on a deposit ticket next to the amount of the check. Others have used "city hyphen bank," five to six digits, found in the numerator to list checks by bank on deposit slips and it has been used in other ways as well.^[20][21] The institution identifier is 1 or above and is located in the numerical and fractional routing numbers on the check.^[22] The non-fractional code is in between transit characters - such as ⑆ - near the lower edge of the check.^[23] The second group of four digits in that number, which precede any parity-check digit, is the bank's number.^[24] The other code, the fractional routing symbol, was on American checks before the use of MICR machines began in the 1950s. The fractional symbol is in the format, XX-XX/XXXX. From that fraction the nine-digit routing number was determined.^[25] The part of the fraction before the hyphen is not used in the 9-digit routing number. The fraction's denominator, however, is and denotes in what branch of the federal reserve the bank saves its money.^[26]

History

In 1911 the new Burroughs Transit Machine, made by the Burroughs Adding Machine Company, was advertised in the first edition of the bank directory Key to Numerical System of the American Bankers' Association.^[27]

The bank numbers in the United States were originated by the American Bankers Association (ABA) in 1911. Banks had been disagreeing on identification. The ABA arranged a meeting of clearing house managers in Chicago in December 1910. The gathering chose a committee to assign each bank in the country convenient numbers to use. In May 1911, the American Bankers Association released the codes.^[28] The numerical committee was W. G. Schroeder, C. R. McKay, and J. A. Walker.^[29] The publisher of the new directory was Rand-McNally and Company.^[30] The ABA clearing house codes are like the sub-headings in a decimal outline. The prefixes mean locations and the suffixes banking firms within those locations. Half of the prefixes represent major cities the other half represent regions of the United States. Lower prefixes are used for higher populations, first based on the 1910 U. S. Census. Likewise, within each prefix area banks are numbered in order of city population and bank senority, although single-bank towns are numbered in alphabetical order. When a new bank is being organized, the current publisher of the directory of banks assigns it a transit code.^[31] The American Bankers Association asked banks to use the directory exclusively so banks would agree on how to sort checks.^[32] The book was abbreviated Key to Numerical System of The American Bankers Association, and as the Key. It was published by Rand McNally & Co.^[33] In 1952 by Rand McNally moved its corporate headquarters to Skokie, Illinois, and became more interested in publishing maps.^[34] Also in Skokie is a company called Accuity, which from its history has been the official registrar of ABA bank numbers since 1911. By 2014 it was the publisher of the semi-annual ABA Key to Routing Numbers and was owned by Reed Business Information, British publisher of reference works for professionals, which in turn is owned by Reed-Elsevier, English-Dutch publisher of online format reference works for professionals.^[35][36] Over the years the ABA's identification numbers for banks accommodated the Federal Reserve Act, the Expedited Funds Act and the Check 21 Act. By 2014 the Key included the U. S. Federal Reserve's nine-digit magnetic-ink routing numbers.^[37]

Special cities

In 1911 the ABA gave reserve bank cities their own prefix because bankers met in those cities to pay the differences between their check bills. The most populous of such cities is fist on the list. The numbers after the prefix numbers represent individual firms offering checking. Clearing house banks were numbered by keeping the numbers they already had. The non-clearing house banks were numbered in the order of their seniority. The treasury offices and post offices were assigned numbers. Overlooked firms were to be identified by clearing house associations.^[38]

Special prefixes

Example bank numbers in Reserve cities

Ordinary cities

The American Bankers' Association wrote a list of banks in the United States.^[45] In this list, starting at prefix 50, cities and towns are in the bank's listing rather than the other way around.^[46] Bank numbers are more for designating checks than for being an address.^[47] In 1911, banks returned groups of checks to other banks for collection.^[48] In 2011, the ABA's Key listed in numerical order the nine-digit routing numbers instead of the five-digit ABA transit item numbers. It put a space after every four digits, the digit grouping the fractional form is based on, and told the bank's name, town and state, after its nine-digit number.^[49]

Country bank prefixes

Example use of country bank numbers

In transit letters, if the payer's prefix is not registered it means the cashier's check was from a small bank in the same town as its correspondent; if the endorser's prefix is not registered it means the endorser was not a bank but someone with an account at the bank.^[51]

In writing transit information, endorser and payer numbers are found on the checks. The endorser's number is read from where the endorser wrote or stamped it on the back of the check. The payer's number is read from where it is printed on the front of the check. The payer number is always that of a bank. If the endorser is not a bank, the endorser's number has no prefix and means either of two things. The endorser might be a depositor at the bank writing the transit letter. The endorser might be a non-depositor in which case the number is that the teller who recorded the endorser's name. Only bank numbers are in transit letters, but the numbers can be looked up. In the American Bankers' Association numbering system, banks are either reserve city banks or not. Level one sections 1 to 49 refer to reserve cities and 50 to 99 to states in the United States. Level two numbers the banks in level one, and those numbers have meaning if their section is known. For example, in the year 1911 the bank number, 50-741, meant Genesee Valley National Bank while 60-741 meant Sewickley Valley Trust Company.^[53] Today, there is a nine-digit number near the bottom edge of the check; its last digit is the "parity check digit" used when checking that number.^[54]

In deposits

One sense of the word, bank, is an amount of something valuable such as money, chips, dominoes, etc.^[55] Some people identify checks on deposit slips by their amounts only, arranging them in decreasing order.^[56] To the left of the amounts, some people write check numbers such as 205, 117, and 320.^[57] A check number might be long, such as "1962721." The modern routing number such as ⑆022300161⑆ tells the bank and is picked based on central bank district and branch used. Its last number is called the "check digit."^[58] Some people write the American Bankers' Association transit numbers such as 90-310, 90-164, and 90-837 to the left of the check amounts.^[59] Under the unexplained instructions, "Please list each check separately by bank number," some people list on the deposit slip the check amounts in no particular order and to the left of them they enter the names of who wrote the checks, such as Thompson, R. J. 15.00, Swann, E. B. 20.00, and Whitt, L. W. 15.00.^[60]

See also

• Bank account
• Bank Identification Number (BIN)
• International Bank Account Number (IBAN)
• Sort code
• Transactional account

References

Sources