If the Bank Pays for fees on a HELOC and does not pass these fees on to the customer, the Bank still needs to disclose them to the Customer as Paid Outside of Closing? Is this correct or does the Bank not disclose them at all.

There is no need to disclose them on a HELOC.

Is there ANY chance that the customer will pay them? Some banks pay the closing costs - but if the line is closed withing a certain time or the customer falls below a minimum balance requirement, then the customer must reimburse the bank - in which case it's not a disclosure issue so much as a contract issue.

Can you direct me to where this is stated in the Regs?

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Can you direct me to where this is stated in the Regs?

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Where what is stated? That you don't need to disclose something? You won't find that - they only talk about what you do need to disclose.

12 CFR 226.5b(d)(7)- "Fees imposed by creditor" If your bank plans on paying the fees up front, yet will definitely charge them back to the customer further down the road if some triggering event happens, then it you should have some contract language that allows it - and include this "but if" situation in your HELOC disclosures.