The regulation clearly states a fax is included in the excessive transaction count. The bank I work at was told prior to my arrival that a fax backed up by a letter in the mail does not count. I don't agree as the money is taken out once the fax arrives. Please confirm.

That would be an interesting loophole. Do you know who (compliance officer, regulator, auditor, consultant) told them that? It might be one of those situations where the question answered did not pertain to the way the answer is now being used.

How are funds being made available?

If you receive a fax, like a telephone request, and you send the funds I can see that it would still be unlimited.