Congress was also concerned about some banks’ paying less than the full amount of checks deposited by their customers because some paying banks charged fees to presenting banks to pay checks. To avoid paying present- ment fees, many collecting banks routed checks through banks that were not charged presentment fees by paying banks. This practice, called circu- itous routing, resulted in extensive delays and ineff iciencies in the check- collection system. In 1917, Congress amended the Federal Reserve Act to prohibit banks from charging the Reserve Banks presentment fees and to authorize nonmember banks as well as member banks to.
