If someone steals a customer's ATM card and uses it, do I have to follow the EFT procedures to resolve it and if the usage was by virtue of the debit feature, is the loss limited to $0 if it's reported in time? I so confused about Reg E.

Yes, Reg. E will apply. If in the debit mode it was used as a branded Visa or MasterCard debit, those more stringent rules will supersede Reg. E. You can contract terms that are more favorable to the consumer than Reg. E, but not less favorable. (This assumes it is a consumer card.)

You'll find some helpful tools in the Banker Tool section of BOL to assist you with claims.