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Finance Receivables and Loans, Net
 12 Months Ended
Dec. 31, 2020
Loans and Leases Receivable, Net Amount [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure Finance Receivables and Loans, Net
The composition of finance receivables and loans reported at amortized cost basis was as follows.
December 31, ($ in millions)
20202019
Consumer automotive (a)$73,668 $72,390 
Consumer mortgage
Mortgage Finance (b)14,632 16,181 
Mortgage — Legacy (c)495 1,141 
Total consumer mortgage15,127 17,322 
Consumer other (d)407 212 
Total consumer89,202 89,924 
Commercial
Commercial and industrial
Automotive19,082 28,332 
Other5,242 5,014 
Commercial real estate5,008 4,961 
Total commercial29,332 38,307 
Total finance receivables and loans (e) (f)$118,534 $128,231 
(a)Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 21 for additional information.
(b)Includes loans originated as interest-only mortgage loans of $8 million and $11 million at December 31, 2020, and December 31, 2019, respectively. All of these loans have exited the interest-only period.
(c)Includes loans originated as interest-only mortgage loans of $30 million and $212 million at December 31, 2020, and December 31, 2019, respectively, of which 99% have exited the interest-only period.
(d)Includes $8 million and $11 million of finance receivables at December 31, 2020, and December 31, 2019, respectively, for which we have elected the fair value option.
(e)Totals include net unearned income, unamortized premiums and discounts, and deferred fees and costs of $2.0 billion at December 31, 2020.
(f)Totals do not include accrued interest receivable, which was $587 million and $488 million at December 31, 2020, and December 31, 2019, respectively. Accrued interest receivable is included in other assets on our Consolidated Balance Sheet.
The following table presents an analysis of the activity in the allowance for loan losses on finance receivables and loans for the year ended December 31, 2020, and includes the cumulative effect of adopting CECL.
($ in millions)
Consumer automotiveConsumer mortgageConsumer other (a)CommercialTotal
Allowance at December 31, 2019$1,075 $46 $9 $133 $1,263 
Cumulative effect of the adoption of Accounting Standards Update 2016-131,334 (6)16 2 1,346 
Allowance at January 1, 20202,409 40 25 135 2,609 
Charge-offs (b)(1,244)(13)(15)(54)(1,326)
Recoveries542 16 1 3 562 
Net charge-offs(702)3 (14)(51)(764)
Provision for credit losses1,194 (10)62 193 1,439 
Other1 — — (2)(1)
Allowance at December 31, 2020$2,902 $33 $73 $275 $3,283 
(a)Excludes $8 million and $11 million of finance receivables at December 31, 2020, and December 31, 2019, respectively, for which we have elected the fair value option.
(b)Refer to Note 1 for information regarding our charge-off policies.
The following table presents an analysis of the activity in the allowance for loan losses on finance receivables and loans for the year ended December 31, 2019, prior to the adoption of CECL, as defined by the previous accounting guidance in effect at that time.
($ in millions)Consumer automotiveConsumer mortgageConsumer other (a)CommercialTotal
Allowance at January 1, 2019$1,048 $53 $— $141 $1,242 
Charge-offs (b)(1,423)(13)(5)(49)(1,490)
Recoveries493 21 — — 514 
Net charge-offs(930)8 (5)(49)(976)
Provision for credit losses957 (13)14 40 998 
Other— (2)— 1 (1)
Allowance at December 31, 2019$1,075 $46 $9 $133 $1,263 
Allowance for loan losses at December 31, 2019
Individually evaluated for impairment$38 $18 $— $33 $89 
Collectively evaluated for impairment1,037 28 9 100 1,174 
Finance receivables and loans at gross carrying value
Ending balance$72,390 $17,322 $201 $38,307 $128,220 
Individually evaluated for impairment538 208 — 215 961 
Collectively evaluated for impairment71,852 17,114 201 38,092 127,259 
(a)Excludes $11 million of finance receivables at December 31, 2019, for which we have elected the fair value option.
(b)Refer to Note 1 for information regarding our charge-off policies.
During the second half of March 2020, the U.S. economy experienced a significant deterioration driven by the COVID-19 pandemic, which impacted our allowance for loan losses. Primarily as a result of the deterioration in the macroeconomic outlook from COVID-19, we posted additional reserves through provision expense in the first and second quarters of 2020. During the third and fourth quarters of 2020, the economic outlook began to improve which resulted in reductions in our allowance for loan losses in those periods.
The following table presents information about significant sales of finance receivables and loans and transfers of finance receivables and loans from held-for-investment to held-for-sale based on net carrying value.
Year ended December 31, ($ in millions)
20202019
Consumer automotive$— $20 
Consumer mortgage464 940 
Total sales and transfers$464 $960 
The following table presents information about significant purchases of finance receivables and loans based on unpaid principal balance at the time of purchase.
Year ended December 31, ($ in millions)
20202019
Consumer automotive$2,355 $531 
Consumer mortgage4,230 3,451 
Consumer other (a)— 117 
Commercial5 46 
Total purchases of finance receivables and loans$6,590 $4,145 
(a)During the year ended December 31, 2019, we also obtained $75 million of finance receivables and loans from our acquisition of Health Credit Services, which we renamed Ally Lending. For additional information on our acquisition, refer to Note 2.
Nonaccrual and Impaired Loans
Following the adoption of CECL as of January 1, 2020, the definitions of impairment and related impaired loan disclosures were removed. Under CECL, we present the amortized cost of our finance receivables and loans on nonaccrual status including such loans with no allowance. The following table presents the amortized cost of our finance receivables and loans on nonaccrual status as of the beginning or end of the year ended December 31, 2020. All consumer or commercial finance receivables and loans that were 90 days or more past due were on nonaccrual status as of December 31, 2020, and December 31, 2019.
December 31, 2020
($ in millions)Nonaccrual status at Jan. 1, 2020Nonaccrual statusNonaccrual with no allowance (a)
Consumer automotive$762 $1,256 $604 
Consumer mortgage
Mortgage Finance17 67 18 
Mortgage — Legacy40 35 28 
Total consumer mortgage57 102 46 
Consumer other2 3 — 
Total consumer821 1,361 650 
Commercial
Commercial and industrial
Automotive73 40 10 
Other138 116 41 
Commercial real estate4 5 5 
Total commercial215 161 56 
Total consumer and commercial finance receivables and loans$1,036 $1,522 $706 
(a)Represents a component of nonaccrual status at end of period.
During the year ended December 31, 2020, we recorded interest income from cash payments of $8 million associated with finance receivables and loans in nonaccrual status.
The following table presents information about our impaired finance receivables and loans at December 31, 2019, prior to the adoption of CECL, as defined by the previous accounting guidance in effect at that time.
December 31, 2019 ($ in millions)
Unpaid principal balance (a)Gross carrying valueImpaired with no allowanceImpaired with an allowanceAllowance for impaired loans
Consumer automotive$553 $538 $113 $425 $38 
Consumer mortgage
Mortgage Finance14 14 6 8 — 
Mortgage — Legacy199 194 64 130 18 
Total consumer mortgage213 208 70 138 18 
Total consumer766 746 183 563 56 
Commercial
Commercial and industrial
Automotive73 73 1 72 12 
Other170 138 73 65 21 
Commercial real estate4 4 4 — — 
Total commercial247 215 78 137 33 
Total consumer and commercial finance receivables and loans
$1,013 $961 $261 $700 $89 
(a)Adjusted for charge-offs.
The following table presents average balance and interest income for our impaired finance receivables and loans for the years ended December 31, 2019, and December 31, 2018, prior to the date of adoption of CECL, as defined by the previous accounting guidance in effect at that time.
20192018
Year ended December 31, ($ in millions)
Average balanceInterest incomeAverage balanceInterest income
Consumer automotive$510 $35 $478 $28 
Consumer mortgage
Mortgage Finance14 1 11 1 
Mortgage — Legacy206 9 218 10 
Total consumer mortgage220 10 229 11 
Total consumer730 45 707 39 
Commercial
Commercial and industrial
Automotive113 2 93 4 
Other121 — 84 — 
Commercial real estate5 — 5 1 
Total commercial239 2 182 5 
Total consumer and commercial finance receivables and loans
$969 $47 $889 $44 
Credit Quality Indicators
We evaluate the credit quality of our consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan. In accordance with regulatory guidance, if borrowers are less than 30 days past due on their loans and enter into loan modifications offered as a result of COVID-19, their loans generally continue to be considered performing loans and continue to accrue interest during the period of the loan modification. For borrowers who are 30 days or more past due when entering into loan modifications offered as a result of COVID-19, we evaluate the loan modifications under our existing troubled debt restructuring framework, and where such a loan modification would result in a concession to a borrower experiencing financial difficulty, the loan is accounted for as a TDR and generally will not accrue interest.
The following table presents the amortized cost basis of our consumer finance receivables and loans by credit quality indicator based on delinquency status at December 31, 2020, and origination year.
Origination yearRevolving loans converted to term
December 31, 2020 ($ in millions)
202020192018201720162015 and priorRevolving loansTotal
Consumer automotive
Current$27,255 $19,204 $12,129 $7,060 $3,678 $1,766 $— $— $71,092 
30–59 days past due281 466 376 264 174 97 — — 1,658 
60–89 days past due66 165 129 88 55 32 — — 535 
90 or more days past due32 108 96 71 46 30 — — 383 
Total consumer automotive27,634 19,943 12,730 7,483 3,953 1,925 — — 73,668 
Consumer mortgage
Mortgage Finance
Current3,432 2,410 1,744 2,254 1,177 3,492 — — 14,509 
30–59 days past due10 9 10 11 7 16 — — 63 
60–89 days past due1 1 3 2 1 3 — — 11 
90 or more days past due1 5 8 10 4 21 — — 49 
Total Mortgage Finance3,444 2,425 1,765 2,277 1,189 3,532 — — 14,632 
Mortgage — Legacy
Current— — — — — 121 303 36 460 
30–59 days past due— — — — — 4 2 — 6 
60–89 days past due— — — — — 2 — — 2 
90 or more days past due— — — — — 20 5 2 27 
Total Mortgage — Legacy— — — — — 147 310 38 495 
Total consumer mortgage3,444 2,425 1,765 2,277 1,189 3,679 310 38 15,127 
Consumer other
Current306 53 13 4 1 — — — 377 
30–59 days past due9 3 1 — — — — — 13 
60–89 days past due4 1 — 1 — — — — 6 
90 or more days past due2 1 — — — — — — 3 
Total consumer other (a)321 58 14 5 1 — — — 399 
Total consumer$31,399 $22,426 $14,509 $9,765 $5,143 $5,604 $310 $38 $89,194 
(a)Excludes $8 million of finance receivables at December 31, 2020, for which we have elected the fair value option.
The following table presents an analysis of our past-due finance receivables and loans recorded at amortized cost basis at December 31, 2019.
($ in millions)30–59 days past due60–89 days past due90 days or more past dueTotal past dueCurrentTotal finance receivables and loans
December 31, 2019
Consumer automotive$2,185 $590 $367 $3,142 $69,248 $72,390 
Consumer mortgage
Mortgage Finance56 11 9 76 16,105 16,181 
Mortgage — Legacy25 8 28 61 1,080 1,141 
Total consumer mortgage81 19 37 137 17,185 17,322 
Consumer other (a)3 2 2 7 194 201 
Total consumer$2,269 $611 $406 $3,286 $86,627 $89,913 
(a)Excludes $11 million of finance receivables at December 31, 2019, for which we have elected the fair value option.
We evaluate the credit quality of our commercial loan portfolio using regulatory risk ratings, which are based on relevant information about the borrower’s financial condition, including current financial information, historical payment experience, credit documentation, and current economic trends, among other factors. We use the following definitions for risk rankings.
Special mention    Loans that have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.
Substandard    Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weakness that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful    Loans that have all the weaknesses inherent in those classified as substandard, with the additional characteristic that the weaknesses make collection or liquidation in full, based on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
The regulatory risk classification utilized is influenced by internal credit risk ratings, which are based on a variety of factors. A borrower’s internal credit risk rating is updated at least annually, and more frequently when a borrower’s credit profile changes, including when we become aware of potential credit deterioration. The following table presents the amortized cost basis of our commercial finance receivables and loans by credit quality indicator based on risk rating at December 31, 2020, and origination year.
Origination yearRevolving loans converted to term
December 31, 2020 ($ in millions)
202020192018201720162015 and priorRevolving loansTotal
Commercial and industrial
Automotive
Pass$869 $220 $58 $91 $76 $34 $15,433 $— $16,781 
Special mention48 23 59 52 9 18 2,013 — 2,222 
Substandard3 2 — — 1 — 72 — 78 
Doubtful— — — — — — 1 — 1 
Total automotive920 245 117 143 86 52 17,519 — 19,082 
Other
Pass536 622 244 210 81 69 2,142 76 3,980 
Special mention76 169 123 190 102 115 123 43 941 
Substandard33 26 — 108 — 77 21 20 285 
Doubtful— — — 6 — 27 2 1 36 
Total other645 817 367 514 183 288 2,288 140 5,242 
Commercial real estate
Pass1,108 928 799 580 651 512 — 2 4,580 
Special mention38 132 116 32 49 43 — — 410 
Substandard— — — 3 6 7 — — 16 
Doubtful— — — — 2 — — — 2 
Total commercial real estate1,146 1,060 915 615 708 562 — 2 5,008 
Total commercial$2,711 $2,122 $1,399 $1,272 $977 $902 $19,807 $142 $29,332 
The following table presents historical credit quality indicators for our commercial finance receivables and loans at December 31, 2019, prior to the adoption of CECL, as defined by the previous accounting guidance in effect at that time.
December 31, 2019
($ in millions)PassCriticized (a)Total
Commercial and industrial
Automotive$25,235 $3,097 $28,332 
Other4,225 789 5,014 
Commercial real estate4,620 341 4,961 
Total commercial$34,080 $4,227 $38,307 
(a)Includes loans classified as special mention, substandard, or doubtful. These classifications are based on regulatory definitions and generally represent loans within our portfolio that have a higher default risk or have already defaulted.
The following table presents an analysis of our past-due commercial finance receivables and loans recorded at amortized cost basis.
($ in millions)30–59 days past due60–89 days past due90 days or more past dueTotal past dueCurrentTotal finance receivables and loans
December 31, 2020
Commercial
Commercial and industrial
Automotive$— $— $— $— $19,082 $19,082 
Other— — — — 5,242 5,242 
Commercial real estate— — 2 2 5,006 5,008 
Total commercial$— $— $2 $2 $29,330 $29,332 
December 31, 2019
Commercial
Commercial and industrial
Automotive$34 $— $28 $62 $28,270 $28,332 
Other— — 17 17 4,997 5,014 
Commercial real estate— — 4 4 4,957 4,961 
Total commercial$34 $— $49 $83 $38,224 $38,307 
Troubled Debt Restructurings
TDRs are loan modifications where concessions were granted to borrowers experiencing financial difficulties. For consumer automotive loans, we may offer several types of assistance to aid our customers, including payment extensions and rewrites of the loan terms. Additionally, for mortgage loans, as part of certain programs, we offer mortgage loan modifications to qualified borrowers. These programs are in place to provide support to our mortgage customers in financial distress, including principal forgiveness, maturity extensions, delinquent interest capitalization, and changes to contractual interest rates. Total TDRs recorded at amortized cost were $2.2 billion, $867 million, and $812 million at December 31, 2020, 2019, and 2018, respectively.
In March 2020, a joint statement was issued by federal and state regulatory agencies, after consultation with the FASB, to clarify that short-term loan modifications are not TDRs if made on a good-faith basis in response to COVID-19 to borrowers who were current prior to any relief. Under this guidance, six months is provided as an example of short-term, and current is defined as less than 30 days past due at the time the modification program is implemented. The guidance also provides that these modified loans generally will not be classified as nonaccrual during the term of the modification. For borrowers who are 30 days or more past due when enrolling in a loan modification program related to the COVID-19 pandemic, we evaluate the loan modifications under our existing TDR framework, and where such a loan modification would result in a concession to a borrower experiencing financial difficulty, the loan was accounted for as a TDR and will generally not accrue interest.
Our consumer auto portfolio accounts for the majority of the year-over-year increase in TDR balances. TDRs in our consumer auto portfolio increased as a result of the COVID-19 loan modification program offered to customers. Additionally, following the expiration of that program, we have continued to support impacted borrowers pursuant to our established risk management policies and practices.
Total commitments to lend additional funds to borrowers whose terms had been modified in a TDR were $14 million, $17 million, and $4 million at December 31, 2020, 2019, and 2018, respectively. Refer to Note 1 for additional information.
The following table presents information related to finance receivables and loans recorded at amortized cost modified in connection with a TDR during the period.
Year ended December 31, ($ in millions)
Number of loansPre-modification amortized cost basisPost-modification amortized cost basis
2020
Consumer automotive (a)114,595 $1,908 $1,835 
Consumer mortgage
Mortgage Finance (b)41 20 20 
Mortgage — Legacy (c)74 9 9 
Total consumer mortgage115 29 29 
Total consumer114,710 1,937 1,864 
Commercial and industrial
Automotive5 45 40 
Other3 81 61 
Total commercial8 126 101 
Total consumer and commercial finance receivables and loans114,718 $2,063 $1,965 
2019
Consumer automotive27,623 $476 $413 
Consumer mortgage
Mortgage Finance8 1 1 
Mortgage — Legacy61 8 8 
Total consumer mortgage69 9 9 
Total consumer27,692 485 422 
Commercial and industrial
Automotive7 46 46 
Other3 82 46 
Total commercial10 128 92 
Total consumer and commercial finance receivables and loans27,702 $613 $514 
2018
Consumer automotive26,748 $426 $378 
Consumer mortgage
Mortgage Finance23 9 9 
Mortgage — Legacy204 30 29 
Total consumer mortgage227 39 38 
Total consumer26,975 465 416 
Commercial and industrial
Automotive3 4 4 
Other3 85 82 
Total commercial6 8986
Total consumer and commercial finance receivables and loans26,981 $554 $502 
(a)Includes 21,045 loans modified as a result of entering into a COVID-19 deferral program with both a pre-modification and post-modification amount of $296 million at December 31, 2020.
(b)Includes 27 loans modified as a result of entering into a COVID-19 deferral program with both a pre-modification and post-modification amount of $14 million at December 31, 2020.
(c)Includes 38 loans modified as a result of entering into a COVID-19 deferral program with both a pre-modification and post-modification amount of $5 million at December 31, 2020.
The following table presents information about finance receivables and loans recorded at amortized cost that have redefaulted during the reporting period and were within 12 months or less of being modified as a TDR. Redefault is when finance receivables and loans meet the requirements for evaluation under our charge-off policy (refer to Note 1 for additional information) except for commercial finance receivables and loans, where redefault is defined as 90 days past due.
Year ended December 31, ($ in millions)
Number of loansAmortized costCharge-off amount
2020
Consumer automotive10,070 $104 $71 
Consumer mortgage
Mortgage Finance1——
Mortgage — Legacy1——
Total consumer finance receivables and loans
10,072 $104 $71 
2019
Consumer automotive7,215 $81 $52 
Total consumer finance receivables and loans
7,215 $81 $52 
2018
Consumer automotive9,711 $111 $73 
Consumer mortgage
Mortgage — Legacy2 — — 
Total consumer finance receivables and loans
9,713$111 $73 
Concentration Risk
Consumer
We monitor our consumer loan portfolio for concentration risk across the states in which we lend. The highest concentrations of consumer loans are in California and Texas, which represented an aggregate of 24.7% and 24.9% of our total outstanding consumer finance receivables and loans at December 31, 2020, and December 31, 2019, respectively.
The following table shows the percentage of consumer automotive and consumer mortgage finance receivables and loans by state concentration based on amortized cost.
2020 (a)2019
December 31,Consumer automotiveConsumer mortgageConsumer automotiveConsumer mortgage
California8.6 %34.3 %8.5 %35.1 %
Texas12.5 8.0 12.4 6.5 
Florida8.8 5.5 8.8 5.1 
Pennsylvania4.5 2.0 4.6 1.9 
Illinois4.0 3.0 4.1 2.6 
North Carolina4.1 2.3 4.0 2.0 
Georgia3.9 3.1 3.9 2.8 
New York3.2 3.4 3.1 3.0 
Ohio3.5 0.5 3.6 0.5 
New Jersey2.9 2.2 2.8 2.3 
Other United States44.0 35.7 44.2 38.2 
Total consumer loans100.0 %100.0 %100.0 %100.0 %
(a)Presentation is in descending order as a percentage of total consumer finance receivables and loans at December 31, 2020.
Commercial Real Estate
The commercial real estate portfolio consists of finance receivables and loans issued primarily to automotive dealers. The following table presents the percentage of total commercial real estate finance receivables and loans by state concentration based on amortized cost.
December 31,20202019
Florida13.3 %11.6 %
Texas13.0 15.0 
California7.9 7.2 
Michigan7.7 8.2 
New York5.6 5.9 
North Carolina5.5 4.6 
Georgia3.6 3.5 
Utah3.0 2.3 
Illinois2.8 2.4 
South Carolina2.5 2.8 
Other United States35.1 36.5 
Total commercial real estate finance receivables and loans100.0 %100.0 %
Commercial Criticized Exposure
Finance receivables and loans classified as special mention, substandard, or doubtful are reported as criticized. These classifications are based on regulatory definitions and generally represent finance receivables and loans within our portfolio that have a higher default risk or have already defaulted. These finance receivables and loans require additional monitoring and review including specific actions to mitigate our potential loss.
The following table presents the percentage of total commercial criticized finance receivables and loans by industry concentration based on amortized cost.
December 31,20202019
Industry
Automotive67.7 %81.7 %
Health/Medical7.3 2.9 
Services5.8 5.4 
Other19.2 10.0 
Total commercial criticized finance receivables and loans100.0 %100.0 %