Loan payoffs overpayment & reimbursements

My bank is wanting to set a dollar limit on reimbursements for loan payoff overpayments. For example, a customer pays off two days earlier than was calculated in the payoff quote and we now have $4 too much - is it worth the effort and cost of a cashiers check to reimburse the customer or should we just keep the difference? We are interested in knowing what dollar limit, if any, other banks use. Also, are there any regulatory issues with us keeping any overpayment?

If it's $1.00 or greater the customer gets it. .99 & under we keep.

It's a really sad state of affairs. Check Reg Z, 226.11 for open-end and 226.21 for closed-end transactions. You'll find that the limit is $1.00.