Slightly fewer than 800,000 black households earned more than $50,000 in the early 1970s. That number has grown exponentially over the last three decades, climbing to approximately 4 million by 2002.
 
Hoping to capitalize on the climbing number of blacks earning higher incomes is BankBlackwell, soon to be the nation’s first black online banking institution.

Earlier this year, the federal Office of Thrift Supervision approved the company’s application to organize a federal savings bank, and last week, BankBlackwell made public its plans to launch the Internet savings bank this summer. The bank plans to serve blacks, their churches and “consumers who seek value, convenience and community,” according to the company’s website.

Tomeeka Farrington, a spokesperson for BankBlackwell, told BlackAmericaWeb.com that BankBlackwell executives are restricted from publicly discussing the venture because they are now raising capital for the company.

But some banking experts are already pumping their fists in the air in support of the new undertaking. Among them is Jim Bruene, who, in 1995, started the Seattle-based publication Online Banking Report, a major resource for banks and technology companies worldwide.

“So far, I really like what BankBlackwell is doing,” said Bruene, a former banker who is considered to be an expert on online banking services.

Stephen Washington, founder and managing director of Black Wealth Network, agreed.

“I think it’s an excellent concept,” said Washington, who started the Cleveland-based online investment service for blacks in May 2003. BWN works with black financial advisors in 39 states and has developed partnerships with Black Enterprise magazine’s Black Wealth Initiative.

For nearly 20 years, Washington has been advising Blacks of all income levels how to properly manage their money. Using the Internet is a safe and efficient way to watch your money grow, a goal that more and more blacks are aspiring to, Washington added.

“People want to save, and I think if given the choice, African-Americans would prefer to do business with African-American financial managers,” Washington said. “Pending on how well [BankBlackwell is] able to market their product, they should have very good success.”

The Boston-based BankBlackwell will be run by James R. Mundy, former chief operating officer of OneUnited Bank, a black-owned and operated bank with branches in Boston, Miami and Los Angeles. OneUnited, which originated as Boston Bank of Commerce, is the nation’s largest black-owned banking institution. Several A-list celebrities, such as Magic Johnson, Janet Jackson and former Motown executive Jheryl Busby are listed as OneUnited shareholders.

Now BankBlackwell is working to secure its own all-star team of private investors. Recent reports have the bank claiming commitments of $860,000 from its officers and directors. One of its more notable organizing directors is Omar Wasow, founder of BlackPlanet.com and a technology analyst for MSNBC.

BankBlackwell does have its detractors, among them Robert Patrick Cooper, senior counsel for BankBlackwell founder James Mundy’s former employer, OneUnited Bank. Cooper recently told the Boston Globe that Mundy was working on a “skimming strategy that only appeals to the affluent.”
 
Calls left with OneUnited were not immediately returned.

Hoping to raise $16 million in initial capital, Mundy’s brainchild will start this summer and offer services including savings accounts, CDs, mortgage and home equity loans, as well as electronic tithing services for faith-based organizations. To reduce overhead costs, the bank will employ a direct banking business model and will conduct business online, by phone and via U.S. mail. BankBlackwell is planning to provide its customers with deposit rates among the nation’s top five percent without a mandatory minimum balance or fees.

In its initial filing to the Office of Thrift Supervision, BankBlackwell said black banks have relatively limited reach, unlike their Asian and Latino counterparts. Although the buying power of highly-paid blacks is expected to grow to more than $900 billion by 2008, there are currently no black-owned banks with assets exceeding $1 billion, BankBlackwell officials said in filings to the OTS. They added that there are currently 47 black-owned banking institutions operating primarily in inner cities that were established to offer banking services to low- and moderate-income individuals.

Prospective customers must establish a BankBlackwell account by linking it to an existing checking account with another banking institution. This, bank officials say, will prevent problems usually associated with changing banks while keeping the convenience of ATM networks offered by traditional banks.