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Derivative Instruments and Hedging Activities (Tables)
 12 Months Ended
Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments in Statement of Financial Position
The following table summarizes the amounts of derivative instruments reported on our Consolidated Balance Sheet. The amounts are presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and are further segregated by type of contract within those two categories.
Derivative contracts in a receivable and payable position exclude open trade equity on derivatives cleared through central clearing counterparties. Any associated margin exchanged with our central clearing counterparties are treated as settlements of the derivative exposure, rather than collateral. Such payments are recognized as settlements of the derivatives contracts in a receivable and payable position on our Consolidated Balance Sheet.
Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.
20202019
Derivative contracts in a
Notional amount
Derivative contracts in a
Notional amount
December 31, ($ in millions)
receivable position
payable position
receivable position
payable position
Derivatives designated as accounting hedges
Interest rate contracts
Swaps
$— $— $12,385 $— $— $17,101 
Purchased options
— — — 62 — 14,100 
Foreign exchange contracts
Forwards
1 — 164 — 3 157 
Total derivatives designated as accounting hedges
1 — 12,549 62 3 31,358 
Derivatives not designated as accounting hedges
Interest rate contracts
Futures and forwards
1 — 391 — — 81 
Written options
15 — 587 2 — 522 
Purchased options
— — — — — 416 
Total interest rate risk
16 — 978 2 — 1,019 
Foreign exchange contracts
Futures and forwards— 1 159 — 2 112 
Total foreign exchange risk— 1 159 — 2 112 
Credit contracts (a)
Other credit derivatives— 28 n/a— — — 
Total credit risk— 28 n/a— — — 
Equity contracts
Written options
— 4 2 — — — 
Total equity risk
— 4 2 — — — 
Total derivatives not designated as accounting hedges
16 33 1,139 2 2 1,131 
Total derivatives
$17 $33 $13,688 $64 $5 $32,489 
(a)The maximum potential amount of undiscounted future payments that could be required under these credit derivatives was $56 million as of December 31, 2020.
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The following table presents amounts recorded on our Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges.
December 31, ($ in millions)
Carrying amount of the hedged itemsCumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
TotalDiscontinued (a)
202020192020201920202019
Assets
Available-for-sale securities (b) (c)$1,259 $1,217 $39 $18 $28 $18 
Finance receivables and loans, net (d)
28,393 33,312 225 135 72 44 
Liabilities
Long-term debt$8,656 $11,995 $169 $24 $203 $127 
(a)Represents the fair value hedging adjustment on qualifying hedges for which the hedging relationship was discontinued. This represents a subset of the amounts reported in the total hedging adjustment.
(b)The carrying amount of hedged available-for-sale securities is presented above using amortized cost and includes $592 million and $230 million at December 31, 2020, and December 31, 2019, respectively, related to closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. Refer to Note 8 for a reconciliation of the amortized cost and fair value of available-for-sale securities.
(c)Includes the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. The amount that has been identified as the last of layer in the discontinued hedge relationship was $1.2 billion and $200 million as of December 31, 2020, and December 31, 2019, respectively. The basis adjustment associated with the discontinued last of layer relationship was a $20 million asset as of December 31, 2020, and a $2 million asset as of December 31, 2019, which was allocated across the entire remaining pool upon termination of the hedge relationship. There were no open last-of-layer relationships at December 31, 2020, or December 31, 2019.
(d)The hedged item represents the carrying value of the hedged portfolio of assets. The amount identified as the last of layer in the open hedge relationship was $9.4 billion and $10.2 billion at December 31, 2020, and December 31, 2019, respectively. The basis adjustment associated with the open last-of-layer relationship was a $153 million asset as of December 31, 2020, and a $91 million asset as of December 31, 2019, which would be allocated across the entire remaining closed pool upon termination or maturity of the hedge relationship. The amount that is identified as the last of layer in the discontinued hedge relationship was $18.5 billion at December 31, 2020, and $12.8 billion at December 31, 2019. The basis adjustment associated with the discontinued last-of-layer hedge relationship was a $72 million asset and $43 million asset as of December 31, 2020, and December 31, 2019, respectively, which was allocated across the entire remaining pool upon termination of the hedge relationship.
Schedule of Derivative Instruments Not Designated as Accounting Hedge
The following table summarizes the location and amounts of gains and losses on derivative instruments not designated as accounting hedges reported in our Consolidated Statement of Income.
Year ended December 31, ($ in millions)
202020192018
(Loss) gain recognized in earnings
Interest rate contracts
Loss (gain) on mortgage and automotive loans, net$(10)$1 $— 
Other income, net of losses
(19)(11)— 
Total interest rate contracts
(29)(10)— 
Foreign exchange contracts
Other income, net of losses
— — 13 
Other operating expenses(7)(4)— 
Total foreign exchange contracts
(7)(4)13 
Credit contracts
Interest and fees on finance receivables and loans(4)— — 
Other income, net of losses(1)— — 
Total credit contracts(5)— — 
Total (loss) gain recognized in earnings$(41)$(14)$13 
Schedule of Location and Amounts of Gains and Losses on Derivative Instruments
The following table summarizes the location and amounts of gains and losses on derivative instruments designated as qualifying fair value and cash flow hedges reported in our Consolidated Statement of Income.
Interest and fees on finance receivables and loansInterest and dividends on investment securities and other earning assetsInterest on depositsInterest on long-term debt
Year ended December 31, ($ in millions)
202020192018202020192018202020192018202020192018
(Loss) gain on fair value hedging relationships
Interest rate contracts
Hedged fixed-rate unsecured debt$— $— $— $— $— $— $— $— $— $(135)$41 $62 
Derivatives designated as hedging instruments on fixed-rate unsecured debt
— — — — — — — — — 135 (41)(61)
Hedged fixed-rate FHLB advances— — — — — — — — — — — 47 
Derivatives designated as hedging instruments on fixed-rate FHLB advances— — — — — — — — — — — (47)
Hedged available-for-sale securities— — — 38 28 (3)— — — — — — 
Derivatives designated as hedging instruments on available-for-sale securities
— — — (38)(28)3 — — — — — — 
Hedged fixed-rate consumer automotive loans139 138 19 — — — — — — — — — 
Derivatives designated as hedging instruments on fixed-rate consumer automotive loans
(139)(138)(19)— — — — — — — — — 
Total gain on fair value hedging relationships
— — — — — — — — — — — 1 
Gain (loss) on cash flow hedging relationships
Interest rate contracts
Hedged variable rate commercial loans
Reclassified from accumulated other comprehensive income into income
73 — — — — — — — — — — — 
Hedged deposit liabilities
Reclassified from accumulated other comprehensive income into income
— — — — — — (8)(4)1 — — — 
Hedged variable-rate borrowings
Reclassified from accumulated other comprehensive income into income
— — — — — — — — — — 15 1 
Total gain (loss) on cash flow hedging relationships
$73 $— $— $— $— $— $(8)$(4)$1 $— $15 $1 
Total amounts presented in the Consolidated Statement of Comprehensive Income$6,581 $7,337 $6,688 $736 $955 $788 $1,952 $2,538 $1,735 $1,249 $1,570 $1,753 
Schedule of Derivative Instruments
The following table summarizes the location and amounts of gains and losses related to interest and amortization on derivative instruments designated as qualifying fair value and cash flow hedges reported in our Consolidated Statement of Income.
Interest and fees on finance receivables and loansInterest and dividends on investment securities and other earning assetsInterest on depositsInterest on long-term debt
Year ended December 31, ($ in millions)
202020192018202020192018202020192018202020192018
Gain (loss) on fair value hedging relationships
Interest rate contracts
Amortization of deferred unsecured debt basis adjustments
$— $— $— $— $— $— $— $— $— $12 $25 $51 
Interest for qualifying accounting hedges of unsecured debt— — — — — — — — — — — 8 
Amortization of deferred secured debt basis adjustments (FHLB advances)
— — — — — — — — — (22)(23)(17)
Interest for qualifying accounting hedges of secured debt (FHLB advances)— — — — — — — — — — — 6 
Amortization of deferred basis adjustments of available-for-sale securities
— — — (7)(3)— — — — — — — 
Interest for qualifying accounting hedges of available-for-sale securities
— — — (6)2 (1)— — — — — — 
Amortization of deferred loan basis adjustments(49)(28)(14)— — — — — — — — — 
Interest for qualifying accounting hedges of consumer automotive loans held-for-investment
(121)22 16 — — — — — — — — — 
Total (loss) gain on fair value hedging relationships
(170)(6)2 (13)(1)(1)— — — (10)2 48 
Gain (loss) on cash flow hedging relationships
Interest rate contracts
Interest for qualifying accounting hedges of variable-rate borrowings— — — — — — — — — — — 8 
Interest for qualifying accounting hedges of deposit liabilities
— — — — — — — (1)3 — — — 
Interest for qualifying accounting hedges of variable-rate commercial loans1 1 — — — — — — — — — — 
Total gain (loss) on cash flow hedging relationships$1 $1 $— $— $— $— $— $(1)$3 $— $— $8 
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The following table summarizes the effect of cash flow hedges on accumulated other comprehensive income (loss).
Year ended December 31, ($ in millions)
202020192018
Interest rate contracts
Gain (loss) recognized in other comprehensive income$105 $(23)$10 
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss)
The following table summarizes the effect of net investment hedges on accumulated other comprehensive income and the Consolidated Statement of Income.
Year ended December 31, ($ in millions)
202020192018
Foreign exchange contracts (a) (b)
(Loss) gain recognized in other comprehensive income$(4)$(6)$12 
(a)There were no amounts excluded from effectiveness testing for the years ended December 31, 2020, 2019, or 2018.
(b)Gains and losses reclassified from accumulated other comprehensive income are reported as other income, net of losses, in the Consolidated Statement of Income. There were no amounts reclassified for the years ended December 31, 2020, 2019, or 2018.