Downey Financial Corp.'s thrift closed its wholesale lending department Thursday and said it is "scaling back" its retail channel, changes that will eliminate 200 jobs, or about 8% of the Newport Beach, Calif., company's work force.

Charles R. Rinehart, who was named Downey's chief executive last month, said in a press release Thursday that the cuts are "a recognition of the company's capital requirements and the changed dynamics in our industry, particularly the decreased ability of borrowers to qualify for loans." In September the Office of Thrift Supervision issued a cease-and-desist order instructing Downey to raise capital this year.

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