There is no regulatory blessing for a waiver in the event of loan payoffs. A bank, however, can waive its own stiffer penalty if the 6 day period has lapsed. You need to have some consistent guidelines for doing so, and it would help if they track "good business sense."
So, for example, you could waive a penalty after 6 days if the customer wants to move the funds into a trust (or out of it), or wants to buy a home, and you're writing the loan, etc.
And the minimum penalty is based on the amount that is withdrawn early.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8