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Platinum Capital to Lay Off 38 Employees in Unit Closure

May 23, 2000|Edmund Sanders | Edmund Sanders covers financial institutions and fraud for The Times. He can be reached at (714) 966-5811 and at edmund.sanders@latimes.com

Platinum Capital Group is laying off 38 employees, or about one-fifth of its staff, as part of the lender's exit from the business of making loans to people with bad credit.

Platinum had expanded into this subprime lending niche last year, but recently decided to close the unit, citing the "increasingly challenging market."

Several subprime lenders have suffered in recent years from growing competition from banks. In addition, Wall Street investors have been paying less to buy subprime loans from companies such as Platinum, making the business less profitable.

Platinum officials said they plan to focus on making traditional mortgages and home-equity loans.

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