Since it was established, the Federal Reserve has worked with the private sector to improve the eff iciency and cost-effectiveness of the check- col lection system. Toward that end, the Federal Reserve and the banking industry developed bank routing numbers in the 1940s. These numbers are still printed on checks to identify the institution on which a check is drawn and to which the check must be presented for payment. In the 1950s, the magnetic ink character recognition (MICR) system for encod- ing pertinent data on checks was developed so that the data could be read electronically. The MICR system contributed signif.
