Customer claims a loan payment was taken out via their debit card before the agreed upon date. I know we do not have chargeback rights, but does this meet the definition of a Reg E error as an in "incorrect" EFT?

Yes it does meet the definition. Rather than take a loss in these situations, I will provisionally credit the account the amount of the claim, refunding any fees the were charged as a result of the payment being deducted early, and then debit the account for the amount of the loan payment on the day the cardholder claims it should have taken place.

Thank you for the answer and solution to the problem.