Yes, George. Unless the paper check is drawn on the consumer's own account and you disclose to the consumer that this is the way these payments are handled, the bill payment transaction is subject to Regulation E.
See the Interpretations to Regulation E in Supplement I, specifically, interpretation (vi) to paragraph 205.3(b)(1).
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8