We have a customer who submitted a Reg. E claim, received provisional credit and then closed their account before the investigation was complete. Now we have determined that the claim was not valid, but we have no way to reverse our provisional credit.

Any ideas on how to recover these funds?

Can we turn this amount in to ChexSystems?

We obviously need a way to prohibit accounts from being closed when there is a pending dispute.

Although you can choose to keep the account open with a zero balance, Reg E prohibits you from stopping a customer from using or withdrawing provisional credit during your investigation.

In you case, depending on your bank's accounting practices, you can reopen the account to overdraw it when you debit the provisional credit and then charge the account off. Since your customer owes you the money, you can report them to a credit reporting agency/chexsystems as your procedures dictate.