The Deposit Ops team that I work with seems to feel that the regulatory verbiage in the final notice to customers is not necessary for those cases determined as being non-REG E qualified.

"The explanation must include a notice of the consumer’s right to request the documents on which the institution relied in making its determination." When I read this - I thought that we would add this verbiage to all no-error final notices to customers.

When should we be using this regulatory verbiage?

If we initiate a Regulation E claim because the customer asserts an error, and then deny the claim because it doesn't meet the definition of an error in 1005.11(a), we owe the customer a notice as directed in 1005.11(d) which includes an explanation of why we believe an error occurred, the right to receive documents, and when provisional credit will be debited

If you know up-front that it is non-reg dispute, such as Defective Merchandise, then they are correct. You would not be required to inform the customer of their right to request docs, as they have no such right. But to Brian's point, if it's asserted as a Reg E error, and then later determined NOT to be, you would still need inform the customer of the right to request docs.

For what it's worth, I agree with you that it's better to just include it with all denial letters, regardless of dispute reason.