This year marks the hundredth anniversary of a prosaic, but integral, feature of the U.S. banking system: uniform routing numbers.
Remarkably, through that entire century, those numbers on the lower left hand corner of your checks have been assigned and catalogued by the same two partners: the American Bankers Association and the company that is known today as Accuity. (When the partnership started, the business was a part of Rand McNally, of World Atlas fame.)
To commemorate the centennial, Accuity held a reception Tuesday night at the Museum of American Finance on Wall Street. On display, in a glass case, was the very first edition, published in 1911, of the Key to Routing Numbers of the American Bankers Association. The book was opened to the first page of listings; the number at the top belonged to Bank of New York ("1:1"). (Full disclosure: Accuity is an affiliate of SourceMedia, the parent company of American Banker. But just to be clear, this newspaper is not affiliated with the ABA.)
According to Hugh M. Jones IV, Accuity's president and chief executive, "there's a science behind" how today's nine-digit routing numbers are generated. The first two digits are determined by a bank's Federal Reserve district, for example, and the third digit indicates which office of that Fed bank serves the institution. The ninth digit is generated by running the first eight through a complex formula, as a control to make sure the routing number is accurate.
In other words, banks can't get vanity-plate routing numbers. "But they ask," Jones said with a chuckle. Once, for instance, a bank requested a routing number matching its zip code.
It all sounds a bit geeky, but standardized routing codes serve a purpose not unlike 10-digit phone numbers or the Dewey decimal system. Before the ABA system was created, each bank offered its own endorsement stamps "without regard to uniformity of numbers," according to the 1911 edition of the Key. This caused "complications and confusion."