Excellent question. I am not aware of any federal law that directly addresses this issue. You might have state law concerns. Examiners could cite a UDAAP violation, but the small amount of the overpayment makes that seem unlikely. If a significant number of customers have small loses it is more likely that a violation might be cited.
If the overpayment is the result of an action of the borrower you might consider imposing a fee for issuing a refund check. The fee will either eliminate the refund, or at least compensate you for the effort. Any such fee should be included in your contract. If the overpayment is the result of a bank error it is not reasonable to impose a fee.
Issuing small refunds is a nuisance, but it is clearly the safe course of action.