That's disappointing. The issue might not be addressed in "examiner school," but it is addressed in high school and college courses on the U.S. legislative system. A regulation can interpret a statute passed by Congress, but it cannot change it.

When Congress passed the Expedited Funds Availability Act it indicated that "local" or "nonlocal" was determined by the two banks' geographic locations. When the FRB issued the first version of Reg CC it "corrected" the statute to say that "local" vs. "nonlocal" could be determined by referencing the transit and routing numbers on the checks. The NCUA immediately sued to represent the interests of credit unions that used "payable through" banks. They got the ruling they asked for in short order; i.e. the FRB wasn't empowered to change Congressional intent even if it was to improve its logic.

If the regulation and the statute it is supposed to interpret conflict, the language in the statute controls.

it's "difficult to imagine" an examiner citing the bank when the reg conflicts with the statue.

The CFPB proposed an amendment to Regulation P that would bring it into line with the statute and, apparently, do a little housekeeping. It's 40 pages and, as I regard the regulation as worthless anyway, I'm going to wait until 1) they make it into a movie or 2) it's final before spending any time with it.