TCH Association filed a letter with the FRB to comment on the fraud prevention adjustment provisions articulated as an interim final rule in Regulation II. TCH Association believes that the 1 cent amount is insufficient to cover the true costs that issuers bear for fraud prevention for several reasons: (i) the Interim Rule bases the 1 cent adjustment amount on what the Federal Reserve calculates to be the median fraud prevention costs of covered issuers, which would deny half of all covered issuers the ability to recoup crucial fraud prevention costs that they incur above 1 cent per transaction, (ii) the 1 cent amount does not include the important fraud prevention costs that issuers incur in responding to customer inquiries about fraudulent or potentially fraudulent activity related to their debit cards, (iii) the 1 cent amount does not include any costs incurred by issuers for adopting and utilizing new fraud prevention technology and systems, and (iv) the 1 cent amount fails to consider at all the higher fraud prevention costs of issuers with assets under $10 billion. The associations believe that when these flaws in the Interim Rule’s calculation of the fraud prevention adjustment amount are rectified, the appropriate amount would be at least 4 to 5 cents per transaction.