Securitizations and Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2018

Securitizations And Variable Interest Entities [Abstract]

The following table presents our involvement in consolidated and nonconsolidated VIEs in which we hold variable interests. For additional detail related to the assets and liabilities of consolidated variable interest entities refer to the Condensed Consolidated Balance Sheet.



($ in millions)	Carrying value of total assets			Carrying value of total liabilities			Assets sold to nonconsolidated VIEs (a)		Maximum exposure to loss in nonconsolidated VIEs
September 30, 2018
On-balance sheet variable interest entities
Consumer automotive	$	16,982	(b)	$	7,113	(c)
Commercial automotive	9,961			4,394
Off-balance sheet variable interest entities
Consumer automotive (d) (e)	52		(f)	—			$	1,462	$	1,514	(g)
Commercial other	762		(h)	346		(i)	—		988		(j)
Total	$	27,757		$	11,853		$	1,462	$	2,502
December 31, 2017
On-balance sheet variable interest entities
Consumer automotive	$	17,597	(b)	$	7,677	(c)
Commercial automotive	12,550			2,558
Off-balance sheet variable interest entities
Consumer automotive	37		(f)	—			$	1,964	$	2,001	(g)
Commercial other	592		(h)	248		(i)	—		790		(j)
Total	$	30,776		$	10,483		$	1,964	$	2,791


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


(b)	Includes $8.5 billion of assets that were not encumbered by VIE beneficial interests held by third parties at both September 30, 2018, and December 31, 2017. Ally or consolidated affiliates hold the interests in these assets.


(c)	Includes $24 million and $29 million of liabilities that were not obligations to third-party beneficial interest holders at September 30, 2018, and December 31, 2017, respectively.

(d)

During the three months ended September 30, 2018, we indicated our intent to exercise clean-up call options related to two nonconsolidated securitization-related VIEs. The options enable us to repurchase the remaining transferred financial assets at our discretion once the asset pool declines to a predefined level and redeem the related outstanding debt. As a result of this event, we became the primary beneficiary of the VIEs, which included $223 million of consumer automotive loans and $219 million of related debt, and the VIEs were consolidated on our Condensed Consolidated Balance Sheet. The related amounts were removed from assets sold to nonconsolidated VIEs and maximum exposure to loss in nonconsolidated VIEs.

(e)

In September 2018, we sold residual interests related to an on-balance sheet VIE to an unrelated third party. As a result of this sale, we are no longer the primary beneficiary of the VIE, and as such have deconsolidated its assets and liabilities from our Condensed Consolidated Balance Sheet including $545 million and $497 million of consumer automotive loans and long-term debt, respectively. We received cash proceeds of $24 million related to this sale, and recognized a pretax gain on sale of $1 million. We will continue to service the assets previously transferred to the VIE.

(f)

Represents retained notes and certificated residual interests, of which $49 million and $36 million were classified as held-to-maturity securities at September 30, 2018, and December 31, 2017, respectively, and $3 million and $1 million was classified as other assets at September 30, 2018, and December 31, 2017, respectively. These assets represent our compliance with the risk retention rules under the Dodd-Frank Act, requiring us to retain at least five percent of the credit risk of the assets underlying asset-backed securitizations.

(g)

Maximum exposure to loss represents the current unpaid principal balance of outstanding loans, retained notes, certificated residual interests, as well as certain noncertificated interests retained from the sale of automotive finance receivables. This measure is based on the very unlikely event that all of our sold loans have defects that would trigger a representation and warranty provision and the underlying collateral supporting the loans becomes worthless. This required disclosure is not an indication of our expected loss.


(h)	Amounts are classified as other assets.


(i)	Amounts are classified as accrued expenses and other liabilities.

(j)

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.

Schedule Of Cash Flow Received And Paid To Nonconsolidated 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 consumer automotive assets (e.g., servicing) that were outstanding during the nine months ended September 30, 2018, and 2017. 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			Consumer mortgage
2018
Cash proceeds from transfers completed during the period	$	24		$	—
Cash disbursements for repurchases during the period	(3		)	—
Servicing fees	14			—
Cash flows received on retained interests in securitization entities	13			—
Representation and warranty recoveries	—			2
2017
Cash proceeds from transfers completed during the period	$	1,187		$	—
Cash disbursements for repurchases during the period (a)	(491		)	—
Servicing fees	25			—
Cash flows received on retained interests in securitization entities	16			—
Other cash flows	4			—


(a)	During the second quarter of 2017, we elected to not renew a retail automotive credit conduit facility and also purchased the related retail automotive loans and settled associated retained interests.

Schedule of Quantitative Information and Net Credit Losses about Securitized and Other Financial Assets Managed Together

The following tables present quantitative information about delinquencies and net credit losses for off-balance sheet securitizations and whole-loan sales where we have continuing involvement.



	Total amount				Amount 60 days or more past due
($ in millions)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Off-balance sheet securitization entities
Consumer automotive	$	1,462	$	1,964	$	12	$	16
Whole-loan sales (a)
Consumer automotive	787		1,399		3		4
Total	$	2,249	$	3,363	$	15	$	20


(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)	2018		2017		2018		2017
Off-balance sheet securitization entities
Consumer automotive	$	2	$	3	$	7	$	9
Whole-loan sales (a)
Consumer automotive	1		1		2		3
Total	$	3	$	4	$	9	$	12


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

- 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.

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