NEW YORK—The Securities and Exchange Commission has requested documents from National City Corp. relating to the sale of its former subprime mortgage unit and other matters as part of an informal probe, the regional bank revealed Friday in a regulatory filing.
According to the bank's quarterly financial report filed with the SEC, the commission has requested certain documents concerning the bank's loan underwriting experience, dividends, bank regulatory matters and the sale of First Franklin Financial Corp. The Cleveland-based bank said it was notified of the investigation by the Chicago Regional Office of the SEC on June 30.
National City spokeswoman Kelly Wagner Amen would not comment on the nature of the probe or whether it would financially affect the company. But she did say it would not impact customer accounts, and that the SEC has not said that National City has acted improperly or illegally.
National City said it intends to cooperate with the SEC.
Merrill Lynch & Co. agreed to acquire First Franklin for $1.3 billion at the height of the real estate boom in late 2006. But the collapse of the subprime mortgage market and the deterioration of the credit market led Merrill to announce in March that it would stop funding loans at the unit and pursue a sale of the business.
National City shares rose 10 cents to close Friday at $5.12. Shares fell in after-hours trading, sliding 13 cents, or 2.5 percent, to $4.99. The stock is down 69 percent for the year.
