Morris Plan 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.

Under this lending approach, would-be borrowers had to submit references from two people of like character and earnings power who would guarantee the borrower's creditworthiness, and agreed to repay the loan through the purchase of Installment Thrift Certificates in weekly installments that would repay the face value of the loan.

At the time Morris Plan banks first appeared in 1910, few institutions existed for provision of consumer credit to low-and middle-income individuals.

Morris Plan banks expanded relying on state charters just as did the nascent credit union movement.

The great majority of loans were made to persons seeking to borrow $100 to $300, who offered their notes, in keeping with the bank’s regulations, to run for twelve months, endorsed by two friends, relatives, or fellow-workers.

Loans made on this basis of credit must carry the privilege of repayment over a period long enough to match the earning power of the borrower.

[6] Russell Sage Foundation viewed the lending procedure to be misleading at best, and at worst, an attempt to defraud the borrowers.

[8] H. Ross Ake was secretary-treasurer and manager of the Canton, Ohio, Morris Plan Bank from its founding in 1916.

[10] Morris graduated from the University of Virginia and made donations at the end of his life to help fund a law library constructed in 1974 and named for him.