If a customer miskeys an atm deposit amount, for too little, and subsequently becomes overdrawn, does that constitute a billing error? What responsibility does the bank have to reimburse? Is there an argument to be made that this is not "an incorrect electronic funds transfer to/from the consumer's account?

Surely the bank discovered the error when it opened the deposit envelope? At that time, the customer's error should have been corrected.

In the example you provide, the accounting of the transaction does not match the true deposit. This would qualify as an error. The overdrawn issue results from that error. Reg. E makes no distinction on who causes an error, just that an error has occurred.

I also agree with John. The ATM would not have balanced and the error, along with related fees, corrected at that time.

Our branch corrected the error and credited the customer the difference. However, they did not look at his account to see if he was overdrawn as a result of it. Thus, fees were not reimbursed until the customer raised this issue, and then only a partial reimbursement was granted since this was not viewed as an error..

Sounds like a little revamp in your procedures are in order.