Arthur J. Morris, the banker and financier who created the Morris Plan, which made consumer credit available to working people, died yesterday at Phelps Memorial Hospital, North Tarrytown. He was 92 years old and lived here.
On April 10, 1910, he opened the first Morris Plan bank, the Fidelity Savings and Trust Company, capitalized at $20,000.
Within two years it had loaned $159,000.
Other Morris Plan banks soon opened in Atlanta, Baltimore, Washington and Richmond.
⇒ Mr. Morris also was credited with beginning the first bank holding company and establishing credit life insurance.
For initiation of credit life insurance, President Lyndon B. Johnson wrote him in 1967,
“Today, half a century later, credit life insurance provides protection for approximately 70 per cent of some $100‐billion worth of consumer credit.”
Mr. Morris was honorary chairman of the Financial General Bankshares in Washington. It is a registered bank holding company that controls Morris Plan Corporation, which has majority and minority interests in 25 banks in the United States.
Morris Plan
Industrial loan company (ILC) or industrial bank is a financial institution in the United States that lends money, and may be owned by non-financial institutions
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 the "Morris Plan".
Under this lending approach, would-be borrowers had to submit references from two people of like character and earning-power to prove 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.[dubious – discuss] Morris Plan Banks expanded to more than 100 locations in the United States.
Morris Plan banks 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 (which provided for the loan to be repaid in case the borrower died during the term of the loan, with any residue going to the borrower's estate).