Securitizations and Variable Interest Entities

We are involved in several types of securitization and financing transactions that utilize special-purpose entities (SPEs). A SPE is an entity that is designed to fulfill a specified limited need of the sponsor. Our principal use of SPEs is to obtain liquidity by securitizing certain of our financial assets and operating lease assets.

The transaction-specific SPEs involved in our securitization and other financing transactions are often considered VIEs. VIEs are entities that have either a total equity investment at risk that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors at risk lack the ability to control the entity's activities.

We provide a wide range of consumer and commercial automotive loans, operating leases, and commercial loans to a diverse customer base. We securitize consumer and commercial automotive loans, and operating leases through private-label securitizations. We often securitize these loans and notes secured by operating leases (collectively referred to as financial assets) through the use of securitization entities, which may or may not be consolidated on our Condensed Consolidated Balance Sheet.

We provide long-term guarantee contracts to investors in certain nonconsolidated affordable housing entities and have extended a line of credit to provide liquidity and minimize our exposure under these contracts. Since we do not have control over the entities or the power to make decisions, we do not consolidate the entities and our involvement is limited to the guarantee and the line of credit.

We have involvement with various other nonconsolidated equity investments, including affordable housing entities and venture capital funds and loan funds. We do not consolidate these entities and our involvement is limited to our outstanding investment, additional capital committed to these funds plus any previously recognized low income housing tax credits that are subject to recapture.

Refer to Note 10 to the Consolidated Financial Statements in our 2015 Annual Report on Form 10-K for further description of our securitization activities and our involvement with VIEs.

Our involvement with consolidated and nonconsolidated VIEs in which we hold variable interests is presented below.



($ in millions)	Involvement with VIEs			Assets of nonconsolidated VIEs (a)			Maximum exposure to loss in nonconsolidated VIEs
March 31, 2016
On-balance sheet variable interest entities
Consumer automotive	$	27,408	(b)
Commercial automotive	15,817
Off-balance sheet variable interest entities
Consumer automotive	25			$	3,647	(c)	$	3,672	(d)
Commercial other	224		(e)	—		(c)	523		(f)
Total	$	43,474		$	3,647		$	4,195
December 31, 2015
On-balance sheet variable interest entities
Consumer automotive	$	27,967	(b)
Commercial automotive	16,763
Off-balance sheet variable interest entities
Consumer automotive	—			$	3,034		$	3,034	(d)
Commercial other	210		(e)	—		(c)	493		(f)
Total	$	44,940		$	3,034		$	3,527


(a)	Asset values represent the current unpaid principal balance of outstanding consumer finance receivables and loans within the VIEs.


(b)	Includes $10.2 billion and $10.6 billion of assets that are not encumbered by VIE beneficial interests held by third parties at March 31, 2016, and December 31, 2015, respectively. Ally or consolidated affiliates hold the interests in these assets which eliminate in consolidation.


(c)	Includes VIEs for which we have no management oversight and therefore we are not able to provide the total assets of the VIEs.

(d)

Maximum exposure to loss represents the current unpaid principal balance of outstanding loans based on our customary representation and warranty provisions and certain noncertificated interests retained from the sale of automotive finance receivables. This measure is based on the unlikely event that all of the loans have underwriting defects or other defects that trigger a representation and warranty provision and the collateral supporting the loans are worthless. This required disclosure is not an indication of our expected loss.


(e)	Includes $234 million and $222 million classified as other assets, offset by $10 million and $12 million classified as accrued expenses and other liabilities at March 31, 2016, and December 31, 2015, respectively.

(f)

For certain nonconsolidated affordable housing entities, maximum exposure to loss represents the yield we guaranteed investors through long term guarantee contracts. The amount disclosed is based on the unlikely event that the underlying properties cease generating yield to investors and the yield delivered to investors in the form of low income tax housing credits is recaptured. For nonconsolidated equity investments, maximum exposure to loss represents our outstanding investment, additional committed capital, and low income housing tax credits subject to recapture. The amount disclosed is based on the unlikely event that our committed capital is funded, our investments become worthless, and the tax credits previously delivered to us are recaptured. This required disclosure is not an indication of our expected loss.

Cash Flows with Off-balance Sheet Securitization Entities

The following table summarizes cash flows received and paid related to securitization entities and asset-backed financings where the transfer is accounted for as a sale and we have a continuing involvement with the transferred assets (e.g., servicing) that were outstanding during the three months ended March 31, 2016, and 2015. Additionally, this table contains information regarding cash flows received from and paid to nonconsolidated securitization entities that existed during each period.



Three months ended March 31, ($ in millions)	Consumer automotive
2016
Cash proceeds from transfers completed during the period	$	1,025
Servicing fees	8
Other cash flows	2
2015
Servicing fees	$	7

Delinquencies and Net Credit Losses

The following tables represent on-balance sheet loans held-for-sale and finance receivable and loans, off-balance sheet securitizations, and whole-loan sales where we have continuing involvement. The tables present quantitative information about delinquencies and net credit losses.



	Total Amount				Amount 60 days or more past due
($ in millions)	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
On-balance sheet loans
Consumer automotive	$	63,013	$	64,292	$	462	$	591
Consumer mortgage	10,675		9,773		97		108
Commercial automotive	34,325		34,895		—		—
Commercial other	2,902		2,745		—		—
Total on-balance sheet loans	110,915		111,705		559		699
Off-balance sheet securitization entities
Consumer automotive	3,139		2,529		8		9
Total off-balance sheet securitization entities	3,139		2,529		8		9
Whole-loan transactions (a)	3,477		2,252		8		13
Total	$	117,531	$	116,486	$	575	$	721


(a)	Whole-loan transactions are not part of a securitization transaction, but represent consumer automotive pools of loans sold to third-party investors.



	Net credit losses
	Three months ended March 31,
($ in millions)	2016		2015
On-balance sheet loans
Consumer automotive	$	173	$	132
Consumer mortgage	6		19
Commercial automotive	—		(1		)
Total on-balance sheet loans	179		150
Off-balance sheet securitization entities
Consumer automotive	2		1
Total off-balance sheet securitization entities	2		1
Total	$	181	$	151