CompuBank

About CompuBank

CompuBank, N.A. emerged in 1998 as a pioneering force in the nascent internet-only banking sector. Founded by banking veteran Frank Goldberg, the Houston-based entity launched online in October 1998, establishing itself as one of the first banks to operate exclusively on the internet.

A significant achievement for the firm was securing a national bank charter from the Office of the Comptroller of the Currency, making it the first American internet-only bank to do so, distinguishing it from predecessors that operated under thrift charters. The bank targeted both consumers and small businesses in the United States, offering a suite of digital banking services. Its business model was centered on providing fee-free services, which included basic and interest checking accounts, savings and money market accounts, certificates of deposit, and free bill payment. Revenue was also generated through partnerships, such as a referral arrangement with comparison-shopping service DealTime.com, where CompuBank earned a fee for customer traffic directed to the partner site.

The product portfolio included Visa check cards, direct deposit, fund transfers, and overdraft protection. A key benefit for customers was the reimbursement of up to four ATM surcharges per month, a considerable consumer advantage at the time. Despite its early entry and attracting strategic investors like SOFTBANK, GE Financial Assurance, and Goldman Sachs, CompuBank struggled to achieve profitability. The initial website was considered amateurish, and a later pivot to focus more on small businesses did not overcome the challenges, partly due to a lack of loan products. After nearly three years of operation, having amassed around 57,000 accounts and over $75 million in deposits, CompuBank was acquired by a competitor, NetBank, in March 2001.