My bank recently setoff all of the money in my checking account to pay my past due line of credit account. After 3 weeks of complaining and getting nowhere despite pointing out that the bank was violating 12 CFE 226, I contacted the OCC who forwarded my complaint to the bank, and the funds were subsequently returned to my account about 30 days after the initial transfer.
2 questions- Is the bank responsible for fees I was charged by other creditors due to my inability to make my monthly payments? Second, would this be considered an unauthorized transfer/bank error that is covered by Regulation E? I can't imagine the bank having zero liability from its attempt to profit by its own wrongful acts...

thanks in advance

I assume you mean 12 CFR 226 which is Reg Z and that this was then a credit card account? Setoff prohibitions do exist there.

In many cases, if the bank does feel it was wrong they should volunteer or agree if requested by you, to send error letters to those charging you a fee. In some cases, not necessarily all, the bank would pay all or some of those fees if they are not waived by the entity charging them.

This wouldn't be a Reg E error because it likely originated with them filling out a paper debit and it was to pay a loan.

If you feel you were wronged and the bank doesn't make you whole, you can complain about those fees charged to you to the OCC and the bank, or seek legal action under Reg Z as a violation (we assume, but don't have all those facts) of Z was the cause of the problem.