DEFINITION of 'Morris Plan Bank'

A type of bank first established in 1910 to lend money to individuals who couldn't obtain loans from mainstream banks. Fidelity Savings & Trust Co. was the first Morris Plan bank. By 1931, there were 109 Morris Plan banks; however, that number declined after the economy recovered from the Great Depression and commercial banks began offering similar loans.

BREAKING DOWN 'Morris Plan Bank'

Named after the Morris Plan's founder, Virgina lawyer Arthur Morris, Morris Plan banks had a unique lending strategy. They did not require collateral for loans, but instead considered the character and community standing of applicants by requiring two endorsers. All three were required to fill out an application covering character, financial history, employment and wages. If the loan was granted, the borrower ended up paying a relatively high rate of interest.

RELATED TERMS
  1. Reverse Morris Trust

    A tax-avoidance strategy, in which a corporation wanting to dispose ...
  2. Industrial Bank

    A financial institution with a limited scope of services. Industrial ...
  3. Commercial Bank

    A financial institution that provides services, such as accepting ...
  4. Loan Committee

    The lending or management committee of a bank or other lending ...
  5. Senior Bank Loan

    A debt financing obligation issued by a bank or similar financial ...
  6. Commercial and Industrial (C&I) ...

    Any type of loan made to a business or corporation and not to ...
Related Articles
  1. Investing

    3 Reasons to Buy Philip Morris International Stock (PM, AAPL)

    Among international tobacco companies, Philip Morris International (NYSE: PM) is the best known in the U.S., with competitors like British American Tobacco (NYSEMKT: BTI) taking a back seat ...
  2. Investing

    How Brexit Could Impact Philip Morris Q2 Earnings (PM)

    Perhaps the biggest question impacting Philip Morris is whether the global tobacco giant can get back to earnings growth?
  3. Investing

    Philip Morris Stock Trades Ex-Dividend Tuesday (PM)

    Philip Morris will send its dividend payment on July 11 to shareholders of record as of June 23.
  4. Investing

    3 Reasons Philip Morris Stock Could Fall (PM)

    One of the most familiar names among dividend investors is international tobacco pioneer Philip Morris International (NYSE: PM), which broke off from its parent company in 2008 following a long ...
  5. Investing

    The Street is Bullish on Philip Morris (PM)

    Next generation products may mean new growth for cigarette maker.
  6. Investing

    Is India Kicking Out Philip Morris International?

    Tobacco giant Philip Morris International (NYSE: PM) may be completely blocked from India's cigarette market if the government's proposals to end foreign investment in the industry are approved. ...
  7. Insights

    Philip Morris: 4 Secrets You Didn't Know (PM)

    Here are five secrets about Philip Morris International, maker of the iconic Marlboro brand cigarettes, that you probably didn't know.
  8. Small Business

    What Happened on Marlboro Friday?

    On Friday, April 2, 1993, cigarette-giant Philip Morris announced it was cutting the price of its Marlboro brand by 20%.
  9. Investing

    Philip Morris Trims Its Stake in Indonesia

    Tobacco giant Philip Morris International (NYSE: PM) plans to sell over $1 billion worth of shares in its Indonesian operation, PT HM Sampoerna, according to The Wall Street Journal. The sale ...
  10. Investing

    Why Philip Morris Could Own the U.S. E-Cig Market

    As Philip Morris International (NYSE: PM) prepares to submit its application for FDA approval of its next-generation iQOS electronic cigarette, it has a clear target in mind: domination of the ...
RELATED FAQS
  1. How do commercial banks make money?

    Learn the different ways commercial banks make money, including interest from loan products and banking fees charged to customers. Read Answer >>
  2. What are the major categories of financial institutions and what are their primary ...

    Understand the various types of financial institutions that exist in today's economy, and learn the purpose each serves in ... Read Answer >>
  3. What impact does the Federal Reserve have on a bank's profitability?

    Learn how the Federal Reserve impacts a bank's profitability with its influence on the discount rate, federal funds rate ... Read Answer >>
  4. How is a bank guarantee different from a traditional loan?

    Read about the differences between a traditional bank loan and a bank guarantee, and why a third party might require a guarantee ... Read Answer >>
  5. How do construction loans work?

    Construction loans are obtained either by the prospective home owner or the actual builder. There are two types of construction ... Read Answer >>
  6. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
Trading Center