Attorney General Bob McDonnell has settled with a car title lender that violated of Virginia's Consumer Finance Act.

Auto Cash Title Loans agreed to refund more than $25,000 to borrowers and pay $15,000 to reimburse attorney's fees. The company also agreed not to collect more than $323,000 owed by 248 borrowers or to repossess vehicles belonging to those who took out loans from January 2006 through June 2007 and defaulted on a loan.

Car title lenders make small loans and hold a borrower's car title as collateral.

McDonnell's office said Tuesday that Auto Cash charged borrowers more than the 12 percent interest allowed under the Consumer Finance Act.

Car title lenders are not regulated in Virginia, so most do business under laws that govern open-end credit, such as credit cards, that allow companies to charge unlimited interest as long as there is no specific date the loan must be repaid. Most other lenders fall under the Consumer Finance Act.