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Car-title lending, like payday lending, began to surface in the 1990s when states exempted the car-title industry from consumer usury limits of around 36% APR. States without car-title lending generally simply have not acted to exempt title lenders from these usury limits. It is important to note that although many lenders argue that they cannot make loans at less than triple-digit rates, others continue to make small loans within these limits, with or without a car-title as collateral. For example, some banks and credit unions offer refinancing on car loans that include cash out to the owner. In addition, the FDIC’s two-year Small-Dollar Loan Pilot Program—which featured unsecured loans of $2,500 or less at a maximum 36% APR for a loan term of at least 90 days—resulted in 34,400 loans with a principal balance of $40.2 million. Even in states that explicitly allow car-title loans at triple-digit APRs, lenders sometimes charge higher rates through a loophole or another statute not intended for their product. For example, even though the Missouri Title Loan Law allows unlimited interest rate charges, it requires a 10% principal reduction upon the third refinancing. To avoid this modest principal reduction requirement, lenders offer car-title loans under the state’s small loan law Several states also authorize installment car-title loans. California, for example, authorizes consumer installment loans up to $5,000, whether unsecured or secured by real or personal property, including liens on motor vehicles. Likewise, New Mexico allows for car-title installment loans. Illinois - explicitly provides for “title-secured loans” in amounts up to $40,000. In Texas, car-title installment loans are explicitly authorized. However, most title lenders in Texas, whether offering traditional car-title loans or car-title installment loans, do so under the Credit Services Organization law. Under this scheme, lenders position themselves as credit services organization (CSOs) and broker loans on behalf of borrowers. This allows title lenders to charge the maximum interest rate allowed on the underlying loan plus an addition brokerage fee.