Securitizations and Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2016

Securitizations And Variable Interest Entities [Abstract]

Variable Interest Entity Disclosure [Text Block]

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 Annual Consolidated Financial Statements 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
September 30, 2016
On-balance sheet variable interest entities
Consumer automotive	$	23,608	(b)
Commercial automotive	15,746
Off-balance sheet variable interest entities
Consumer automotive	24			$	3,240	(c)	$	3,264	(d)
Commercial other	268		(e)	—		(c)	556		(f)
Total	$	39,646		$	3,240		$	3,820
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 $10.0 billion and $10.6 billion of assets that are not encumbered by VIE beneficial interests held by third parties at September 30, 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 $276 million and $222 million classified as other assets, offset by $8 million and $12 million classified as accrued expenses and other liabilities at September 30, 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 nine months ended September 30, 2016, and 2015. Additionally, this table contains information regarding cash flows received from and paid to nonconsolidated securitization entities that existed during each period.



Nine months ended September 30, ($ in millions)	Consumer automotive
2016
Cash proceeds from transfers completed during the period	$	1,659
Servicing fees	27
Other cash flows	6
2015
Cash proceeds from transfers completed during the period	$	1,044
Servicing fees	21

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)	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
On-balance sheet loans
Consumer automotive	$	64,816	$	64,292	$	603	$	591
Consumer mortgage	10,857		9,773		80		108
Commercial automotive	36,036		34,895		—		—
Commercial other	3,306		2,745		—		—
Total on-balance sheet loans	115,015		111,705		683		699
Off-balance sheet securitization entities
Consumer automotive	2,734		2,529		11		9
Total off-balance sheet securitization entities	2,734		2,529		11		9
Whole-loan sales (a)	3,556		2,252		6		13
Total	$	121,305	$	116,486	$	700	$	721


(a)	Whole-loan sales 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 September 30,						Nine months ended September 30,
($ in millions)	2016			2015			2016		2015
On-balance sheet loans
Consumer automotive	$	219		$	156		$	540	$	384
Consumer mortgage	(6		)	6			4		29
Commercial automotive	—			—			—		—
Commercial other	—			(1		)	—		(2		)
Total on-balance sheet loans	213			161			544		411
Off-balance sheet securitization entities
Consumer automotive	2			1			6		3
Total off-balance sheet securitization entities	2			1			6		3
Whole-loan sales	1			—			2		—
Total	$	216		$	162		$	552	$	414

Schedule of Variable Interest Entities [Table Text Block]

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
September 30, 2016
On-balance sheet variable interest entities
Consumer automotive	$	23,608	(b)
Commercial automotive	15,746
Off-balance sheet variable interest entities
Consumer automotive	24			$	3,240	(c)	$	3,264	(d)
Commercial other	268		(e)	—		(c)	556		(f)
Total	$	39,646		$	3,240		$	3,820
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 $10.0 billion and $10.6 billion of assets that are not encumbered by VIE beneficial interests held by third parties at September 30, 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)


(e)	Includes $276 million and $222 million classified as other assets, offset by $8 million and $12 million classified as accrued expenses and other liabilities at September 30, 2016, and December 31, 2015, respectively.

(f)

Schedule Of Cash Flow Received And Paid To Nonconsolidated Securitization Entities [Table Text Block]



Nine months ended September 30, ($ in millions)	Consumer automotive
2016
Cash proceeds from transfers completed during the period	$	1,659
Servicing fees	27
Other cash flows	6
2015
Cash proceeds from transfers completed during the period	$	1,044
Servicing fees	21

Schedule of Quantitative Information and Net Credit Losses about Securitized and Other Financial Assets Managed Together [Table Text Block]



	Total Amount				Amount 60 days or more past due
($ in millions)	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
On-balance sheet loans
Consumer automotive	$	64,816	$	64,292	$	603	$	591
Consumer mortgage	10,857		9,773		80		108
Commercial automotive	36,036		34,895		—		—
Commercial other	3,306		2,745		—		—
Total on-balance sheet loans	115,015		111,705		683		699
Off-balance sheet securitization entities
Consumer automotive	2,734		2,529		11		9
Total off-balance sheet securitization entities	2,734		2,529		11		9
Whole-loan sales (a)	3,556		2,252		6		13
Total	$	121,305	$	116,486	$	700	$	721


(a)	Whole-loan sales 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 September 30,						Nine months ended September 30,
($ in millions)	2016			2015			2016		2015
On-balance sheet loans
Consumer automotive	$	219		$	156		$	540	$	384
Consumer mortgage	(6		)	6			4		29
Commercial automotive	—			—			—		—
Commercial other	—			(1		)	—		(2		)
Total on-balance sheet loans	213			161			544		411
Off-balance sheet securitization entities
Consumer automotive	2			1			6		3
Total off-balance sheet securitization entities	2			1			6		3
Whole-loan sales	1			—			2		—
Total	$	216		$	162		$	552	$	414

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details