Don't punch the 'debit' button on that supermarket keypad the next time you buy a loaf of bread with your KeyBank debit card.

Starting today, it'll cost you a quarter each time.

Unless you take the bank's advice and punch the 'credit' button instead, or qualify as one of KeyBank's favored customers, meaning you keep cumulative balances in your KeyBank accounts of $2,000 or more.

KeyBank, a subsidiary of Cleveland-based KeyCorp, is the first financial institution with branches in Oregon to initiate so-called PIN-based debit card transaction fees. The bank has 27 branches in the Portland area.

Other banks in the region are likely to follow suit, predicted Wesley Lawrence, president of the KeyBank Oregon/Southwest Washington district. But officials at U.S. Bank and Wells Fargo, the region's two biggest financial institutions, denied they have any plans to impose such fees.

PIN-based transactions are the ones merchants ask you to complete by punching your personal identification number into a keypad rather than signing for the purchase.

KeyBank's rationale for imposing the PIN-based fees is to alleviate the cost of electronic payments processing.

'It is more costly for banks to process a debit transaction than a credit transaction,' Lawrence said, 'so we're trying to change the behavior, so to speak, of our clients to move towards credit transactions.'

Jason Reynolds, executive director of the Oregon Consumer League, blasted KeyBank's action but agreed that other financial institutions would soon follow 'if KeyBank gets away with this.'

'I think banks are so predatory and rapacious there's no point in dealing with them anymore,' he said. He recommended that consumers take their business to credit unions or small banks.

'Banks used to be quasi-utilities. But they have abandoned that role completely,' Reynolds said. 'It's all about how to make the most money in the shortest amount of time.'

Pushing their customers toward credit cards, Reynolds said, means promoting accounts on which interest rates of 15 percent to 18 percent are charged.

Deborah Sakamoto, a spokeswoman for KeyBank in Oregon, said that 'it is not Key's intention to generate revenue from this.'

She estimated that less than 20 percent of the bank's Oregon clients would be affected by the new charge and that most of them could avoid the charge by pressing 'credit.'

'We've been spending time since November educating our clients on how to avoid the fee,' she said. 'We've had statement stuffers. And it's been printed on our statements.'

Charter One Financial Corp., another Cleveland-based bank, has gone even further than Key, imposing a $1 PIN debit fee for each transaction.

Contact Harry Lenhart at

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