We securitize, transfer, and service consumer and commercial automotive loans, and operating leases. We often securitize these loans and notes secured by operating leases (collectively referred to as financial assets) using SPEs. An SPE is a legal 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. SPEs are often VIEs and may or may not be included on our Condensed Consolidated Balance Sheet.

VIEs are legal entities that either have an insufficient amount of equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack the ability to control the entity’s activities that most significantly impact economic performance through voting or similar rights, or do not have the obligation to absorb the expected losses or the right to receive expected residual returns of the entity.

The VIEs included on the Condensed Consolidated Balance Sheet represent SPEs where we are deemed to be the primary beneficiary, primarily due to our servicing activities and our beneficial interests in the VIE that could be potentially significant.

The nature, purpose, and activities of nonconsolidated SPEs are similar to those of our consolidated SPEs with the primary difference being the nature and extent of our continuing involvement. For nonconsolidated SPEs, the transferred financial assets are removed from our balance sheet provided the conditions for sale accounting are met. The financial assets obtained from the securitization are primarily reported as cash or retained interests (if applicable). Liabilities incurred as part of these securitizations, are recorded at fair value at the time of sale and are reported as accrued expenses and other liabilities on our Condensed Consolidated Balance Sheet. Upon the sale of the loans, we recognize a gain or loss on sale for the difference between the assets recognized, the assets derecognized, and the liabilities recognized as part of the transaction. With respect to our ongoing right to service the assets we sell, the servicing fee we receive represents adequate compensation, and consequently, we do not recognize a servicing asset or liability.

We provide long-term guarantee contracts to investors in certain nonconsolidated affordable housing entities and have extended a line of credit to provide liquidity. 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 are involved 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.

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, 2020
On-balance sheet variable interest entities
Consumer automotive	$	18,926	(b)	$	3,818	(c)
Commercial automotive	5,967			2,151
Off-balance-sheet variable interest entities
Consumer automotive (d)	7		(e)	—			$	121	$	128	(f)
Commercial other	1,240		(g)	459		(h)	—		1,618		(i)
Total	$	26,140		$	6,428		$	121	$	1,746
December 31, 2019
On-balance sheet variable interest entities
Consumer automotive	$	20,376	(b)	$	6,070	(c)
Commercial automotive	8,009			3,049
Off-balance-sheet variable interest entities
Consumer automotive (d)	23		(e)	—			$	417	$	440	(f)
Commercial other	1,079		(g)	378		(h)	—		1,397		(i)
Total	$	29,487		$	9,497		$	417	$	1,837

(b)Includes $9.7 billion and $9.0 billion of assets that were not encumbered by VIE beneficial interests held by third parties at September 30, 2020, and December 31, 2019, respectively. Ally or consolidated affiliates hold the interests in these assets.

(d)During both the three months ended September 30, 2020, and the year ended December 31, 2019, respectively, we indicated our intent to exercise a clean-up call option related to nonconsolidated securitization-related VIEs. The option enables 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 these events, we became the primary beneficiary of the VIEs, which included principal balances of $103 million and $48 million of consumer automotive loans during the three months ended September 30, 2020, and the year ended December 31, 2019, respectively, 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)Represents retained notes and certificated residual interests, of which $6 million and $21 million were classified as held-to-maturity securities at September 30, 2020, and December 31, 2019, respectively, and $1 million and $2 million were classified as other assets at September 30, 2020, and December 31, 2019, respectively. These assets represent our five percent interest in the credit risk of the assets underlying asset-backed securitizations.

(f)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, warranty, and covenant provision and the underlying collateral supporting the loans becomes worthless. This required disclosure is not an indication of our expected loss.

(i)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 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..

The following table summarizes cash flows received and paid related to SPEs 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 (for example, servicing) that were outstanding during the nine months ended September 30, 2020, and 2019. Additionally, this table contains information regarding cash flows received from and paid to nonconsolidated SPEs that existed during each period.


Nine months ended September 30, ($ in millions)	Consumer automotive
2020

Cash flows received on retained interests in securitization entities	$	11
Servicing fees	3
Cash disbursements for repurchases during the period	(2)


2019

Cash flows received on retained interests in securitization entities	$	18
Servicing fees	8
Cash disbursements for repurchases during the period	(2)


	Total amount				Amount 60 days or more past due
($ in millions)	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019






Off-balance-sheet securitization entities
Consumer automotive	$	121	$	417	$	2	$	6

Whole-loan sales (a)
Consumer automotive	—		207		—		2
Total	$	121	$	624	$	2	$	8


	Net credit losses
	Three months ended September 30,				Nine months ended September 30,
($ in millions)	2020		2019		2020		2019
Off-balance-sheet securitization entities
Consumer automotive	$	—	$	1	$	1	$	5

Whole-loan sales (a)
Consumer automotive	—		—		—		1
Total	$	—	$	1	$	1	$	6