Morris Plan Corp.

Morris Plan Banks were part of a historic banking system in the United States created to assist the middle class in obtaining loans that were often difficult to obtain at traditional banks. They were established by Arthur J. Morris (1881–1973), a lawyer in Norfolk, Virginia who noticed the difficulty his working clients had in getting loans. The first was started in 1910 in Norfolk, and the second in Atlanta in 1911.

The plans established installment credit for customers. Lending required the borrower to provide references and proof of earnings to establish the borrower's credit worthiness. The banks gave depositors interest to secure funds for the loans. The banks were eventually organized as a New York-based banking organization (holding company) and made small loans to moderate income families through banks in more than 100 U.S. cities. In 1917 credit life insurance plans were offered. Morris Banks made 1,760,000 loans in its first 12 years, amounting to about $320 million.

The banks were affected by the Great Depression and changes to the banking industry in its aftermath.

In 1910, attorney Arthur J. Morris (1881–1973) opened the Fidelity Savings and Trust Company in Norfolk, Virginia, which made small loans to working people under a concept he called "Morris Plan." Under this lending approach, would-be borrowers had to submit references from two people of like character and earnings power to guarantee the borrower's creditworthiness, and agreed to repay the loan through the purchase of Installment Thrift Certificates in weekly installments equal to the face value of the loan, less origination and investigative fees. Morris Plan Banks expanded to more than 100 locations in the United States.

Morris Plans pioneered the use of automotive financing (through arrangements between the Morris Plan Company of America, essentially a holding company for Morris Plan banks, and the Studebaker Corporation) and, through the subsidiary Morris Plan Insurance Society, credit life insurance (as allowed for the loan to be repaid in case the borrower died during the term of the loan, with any residue going to the estate).

H. Ross Ake was secretary-treasurer and manager of the Canton, Ohio Morris Plan Bank from its founding in 1916. He also was on the Board of Governors of the National Association of Morris Plan Bankers (Industrial loan company#Origins of the concept).

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