Who’s Behind the Financial Meltdown?

Published — May 6, 2009 Updated — May 19, 2014 at 12:19 pm ET

No. 4 of The Subprime 25: First Franklin Corp./National City Corp./Merrill Lynch & Co.


Total high-interest loans 2005-2007:

At least $68 billion

Federal bailout money received:

None. However, Bank of America’s purchase of Merrill brought with it $10 billion from the Troubled Asset Relief Program. In addition, PNC Financial Services Group reportedly used a portion of the $7.6 billion in TARP money it received to buy National City in 2008.

Company overview

  • Status: CLOSED. In March 2008, First Franklin and NationPoint closed all wholesale and retail loan operations.
  • History: Founded by brothers William and Steve Dallas, First Franklin Financial transformed from a small retail brokerage to a national full-service mortgage lender. The lender was acquired by Cleveland-based National City Corp. in August, 1999. It advertised “flexible, purchase-friendly mortgage solutions,” which included mortgages with low rates for the first two years. Merrill Lynch, in an attempt to vertically integrate its mortgage originating and securitizing operations, bought First Franklin for $1.3 billion on December 30, 2006, just as the market was going bust.
  • Parent/subsidiary companies: Merrill Lynch acquired First Franklin Financial Corp. and affiliated lending units NationPoint and National City Home Loan Services Inc. in late 2006.
  • CEO: President/CEO (First Franklin): L. Andrew Pollock
    • Most recent salary: Not available
  • Location: San Jose, California
  • Year founded: 1981
  • Backers: First Franklin partnered with investment banks such as Goldman Sachs and Bank of America to issue securities from its loans, according to financial statements. Other banks, such as Deutsche Bank’s HSI Asset Securitization Corporation Trust, pooled First Franklin loans.

Lobbying overview

  • Lobbying: 1999-2008: National City Corp. reported $1,979,432 in lobbying expenditures. **
  • Total Contributions: At least $1,737,922 *
  • Top Recipients:
    1. Former Senator Mike DeWine, R-Ohio $80,575
    2. Former Representative Deborah Pryce, R-Ohio $74,973
    3. Representative Steven LaTourette, R-Ohio $60,950
    4. Republican National Committee $50,650
    5. Senator George Voinovich, R-Ohio $49,250

** Lobbying totals calculated by the Center for Public Integrity using data from the Senate Office of Public Records.

* Contribution grand total includes employee and soft money contributions from the lender and its subsidiaries. Top recipient totals include employee and political action committee contributions. Data provided by CQ Money Line, analysis by the Center for Public Integrity.

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