To the Editor:

We read with great interest the quote from the Comptroller of the Currency that "the business plans of the pure, stand-alone Internet banks clearly did not work" ("NextCard's Bank Unit Shut by OCC," Feb. 8, page 1). There is no economic reason why an Internet-only bank cannot be successful.

Banking is a digital medium and is ideally suited to Internet delivery. As bankers, we must all tread carefully when implementing change, but change is necessary. Banks are not immune from evolution, and the evolution of banking requires change. However, the fundamentals of credit quality and liquidity management remain with all of us. There was a time when branch banking was a new concept as was consumer lending. Both later became very important to successful banking.

In the end, sound banking principles will prevail regardless of the delivery channel. Bank of Internet USA is a pure, stand-alone Internet bank. After only 16 months (we opened on July 4, 2000), we became profitable and are profitable on a year-to-date basis in our second year of operation. We never considered that we were any less of a bank because we used a new delivery channel. Nor do we have illusions that we have a new easy way to manage a bank.

Credit problems will destroy any bank. Rather than categorically state that all Internet banks are "not working," we need to see which ones are working and prospering by using the Internet and technology to advance banking to the next level.

Internet banking is here to stay. In fact, it is the best way to bank for many transactions. Just because many banks have been unable to evolve doesn't mean all won't.