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Finance Receivables and Loans, Net
 3 Months Ended
Mar. 31, 2021
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.
($ in millions)March 31, 2021December 31, 2020
Consumer automotive (a)$73,998 $73,668 
Consumer mortgage
Mortgage Finance (b)12,445 14,632 
Mortgage — Legacy (c)458 495 
Total consumer mortgage12,903 15,127 
Consumer other (d)490 407 
Total consumer87,391 89,202 
Commercial
Commercial and industrial
Automotive15,132 19,082 
Other5,541 5,242 
Commercial real estate5,012 5,008 
Total commercial25,685 29,332 
Total finance receivables and loans (e) (f)$113,076 $118,534 
(a)Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 17 for additional information.
(b)Includes loans originated as interest-only mortgage loans of $7 million and $8 million at March 31, 2021, and December 31, 2020, respectively. All of these loans have exited the interest-only period.
(c)Includes loans originated as interest-only mortgage loans of $27 million and $30 million at March 31, 2021, and December 31, 2020, respectively, of which 99% have exited the interest-only period.
(d)Includes $8 million of finance receivables at both March 31, 2021, and December 31, 2020, 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 $2.1 billion and $2.0 billion at March 31, 2021, and December 31, 2020, respectively.
(f)Totals do not include accrued interest receivable, which was $506 million and $587 million at March 31, 2021, and December 31, 2020, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.
The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans for the three months ended March 31, 2021, and March 31, 2020, respectively.
Three months ended March 31, 2021 ($ in millions)
Consumer automotiveConsumer mortgageConsumer other (a)CommercialTotal
Allowance at December 31, 2020$2,902 $33 $73 $275 $3,283 
Charge-offs (b)(284)(2)(8)(14)(308)
Recoveries187 3 — — 190 
Net charge-offs(97)1 (8)(14)(118)
Provision for credit losses4 (7)3 (13)(13)
Other— (1)1 — — 
Allowance at March 31, 2021$2,809 $26 $69 $248 $3,152 
(a)Excludes $8 million of finance receivables at both March 31, 2021, and December 31, 2020, for which we have elected the fair value option.
(b)Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for information regarding our charge-off policies.
Three months ended March 31, 2020 ($ 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 2016-13		1,334 (6)16 2 1,346 
Allowance at January 1, 20202,409 40 25 135 2,609 
Charge-offs (b)(373)(3)(5)(3)(384)
Recoveries111 5 1 1 118 
Net charge-offs(262)2 (4)(2)(266)
Provision for credit losses685 (3)25 196 903 
Other1 — (1)(1)(1)
Allowance at March 31, 2020$2,833 $39 $45 $328 $3,245 
(a)Excludes $10 million and $11 million of finance receivables at March 31, 2020, and December 31, 2019, respectively, for which we have elected the fair value option.
(b)Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for information regarding our charge-off policies.
During the second half of March 2020, the U.S. economy experienced a significant deterioration driven by the COVID-19 pandemic, which impacted our allowance for loan losses. Primarily as a result of the deterioration in the macroeconomic outlook from COVID-19, we recorded additional reserves through provision expense in the first quarter of 2020. During the first quarter of 2021, the economic outlook continued to improve which resulted in reductions in our allowance for loan losses in the period.
The following table presents information about significant sales of finance receivables and loans and transfers of finance receivables and loans from held for investment to held for sale based on net carrying value.
Three months ended March 31,
($ in millions)20212020
Consumer mortgage$329 $— 
Total sales and transfers$329 $— 
The following table presents information about significant purchases of finance receivables and loans based on unpaid principal balance at the time of purchase.
Three months ended March 31,
($ in millions)20212020
Consumer automotive$577 $360 
Consumer mortgage188 484 
Total purchases of finance receivables and loans$765 $844 
Nonaccrual Loans
The following tables present the amortized cost of our finance receivables and loans on nonaccrual status. All consumer or commercial finance receivables and loans that were 90 days or more past due were on nonaccrual status as of March 31, 2021, and December 31, 2020.
March 31, 2021
($ in millions)Nonaccrual status at Jan. 1, 2021Nonaccrual statusNonaccrual with no allowance (a)
Consumer automotive$1,256 $1,173 $554 
Consumer mortgage
Mortgage Finance67 63 23 
Mortgage — Legacy35 32 27 
Total consumer mortgage102 95 50 
Consumer other3 2 — 
Total consumer1,361 1,270 604 
Commercial
Commercial and industrial
Automotive40 17 1 
Other116 150 85 
Commercial real estate5 2 2 
Total commercial161 169 88 
Total finance receivables and loans$1,522 $1,439 $692 
(a)Represents a component of nonaccrual status at end of period.
December 31, 2020
($ 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 finance receivables and loans$1,036 $1,522 $706 
(a)Represents a component of nonaccrual status at end of period.
During both the three months ended March 31, 2021, and March 31, 2020, we recorded interest income from cash payments of $2 million, associated with finance receivables and loans in nonaccrual status.
Credit Quality Indicators
We evaluate the credit quality of our consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan. In accordance with regulatory guidance, if borrowers are less than 30 days past due on their loans and enter into loan modifications offered as a result of COVID-19, their loans generally continue to be considered performing loans and continue to accrue interest during the period of the loan modification. For borrowers who are 30 days or more past due when entering into loan modifications offered as a result of COVID-19, we
evaluate the loan modifications under our existing troubled debt restructuring framework, and where such a loan modification would result in a concession to a borrower experiencing financial difficulty, the loan is accounted for as a TDR and generally will not accrue interest.
The following tables present the amortized cost basis of our consumer finance receivables and loans by credit quality indicator based on delinquency status and origination year.
Origination yearRevolving loans converted to term
March 31, 2021 ($ in millions)
202120202019201820172016 and priorRevolving loansTotal
Consumer automotive
Current$8,900 $24,842 $17,404 $10,794 $6,114 $4,362 $— $— $72,416 
30–59 days past due9 205 285 223 153 146 — — 1,021 
60–89 days past due1 59 92 67 44 42 — — 305 
90 or more days past due— 34 71 59 42 50 — — 256 
Total consumer automotive8,910 25,140 17,852 11,143 6,353 4,600 — — 73,998 
Consumer mortgage
Mortgage Finance
Current762 3,099 1,805 1,333 1,733 3,611 — — 12,343 
30–59 days past due— 11 6 7 6 14 — — 44 
60–89 days past due— 2 1 4 2 5 — — 14 
90 or more days past due— 1 5 9 4 25 — — 44 
Total Mortgage Finance762 3,113 1,817 1,353 1,745 3,655 — — 12,445 
Mortgage — Legacy
Current— — — — — 109 286 31 426 
30–59 days past due— — — — — 2 2 1 5 
60–89 days past due— — — — — 2 — — 2 
90 or more days past due— — — — — 17 6 2 25 
Total Mortgage — Legacy— — — — — 130 294 34 458 
Total consumer mortgage762 3,113 1,817 1,353 1,745 3,785 294 34 12,903 
Consumer other
Current173 248 39 10 3 1 — — 474 
30–59 days past due1 2 1 — — — — — 4 
60–89 days past due— 2 — — — — — — 2 
90 or more days past due— 2 — — — — — — 2 
Total consumer other (a)174 254 40 10 3 1 — — 482 
Total consumer$9,846 $28,507 $19,709 $12,506 $8,101 $8,386 $294 $34 $87,383 
(a)Excludes $8 million of finance receivables at March 31, 2021, for which we have elected the fair value option.
Origination yearRevolving loans converted to term
December 31, 2020 ($ 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.
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 tables present the amortized cost basis of our commercial finance receivables and loans by credit quality indicator based on risk rating and origination year.
Origination yearRevolving loans converted to term
March 31, 2021 ($ in millions)
202120202019201820172016 and priorRevolving loansTotal
Commercial and industrial
Automotive
Pass$130 $632 $209 $52 $81 $82 $12,272 $— $13,458 
Special mention10 31 22 48 46 41 1,425 — 1,623 
Substandard— 2 2 1 — 1 45 — 51 
Doubtful— — — — — — — — — 
Total automotive140 665 233 101 127 124 13,742 — 15,132 
Other
Pass122 532 628 269 201 199 2,443 85 4,479 
Special mention— 75 143 84 101 181 107 17 708 
Substandard— 33 25 — 139 76 25 20 318 
Doubtful— — — — 6 27 2 1 36 
Total other122 640 796 353 447 483 2,577 123 5,541 
Commercial real estate
Pass167 1,142 918 785 538 1,105 — 3 4,658 
Special mention7 66 130 50 32 51 — — 336 
Substandard— — — — 3 13 — — 16 
Doubtful— — — — — 2 — — 2 
Total commercial real estate174 1,208 1,048 835 573 1,171 — 3 5,012 
Total commercial$436 $2,513 $2,077 $1,289 $1,147 $1,778 $16,319 $126 $25,685 
Origination yearRevolving loans converted to term
December 31, 2020 ($ 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 $29,332 
The following table presents an analysis of our past-due commercial finance receivables and loans recorded at amortized cost basis.
($ in millions)30–59 days past due60–89 days past due90 days or more past dueTotal past dueCurrentTotal finance receivables and loans
March 31, 2021
Commercial
Commercial and industrial
Automotive$— $— $— $— $15,132 $15,132 
Other— — 5 5 5,536 5,541 
Commercial real estate3 — 2 5 5,007 5,012 
Total commercial$3 $— $7 $10 $25,675 $25,685 
December 31, 2020
Commercial
Commercial and industrial
Automotive$— $— $— $— $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 
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 $2.4 billion and $2.2 billion at March 31, 2021, and December 31, 2020, respectively.
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 $17 million and $14 million at March 31, 2021, and December 31, 2020, respectively. Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for additional information.
The following table presents information related to finance receivables and loans recorded at amortized cost modified in connection with a TDR during the period.
20212020
Three months ended March 31, ($ in millions)
Number of loansPre-modification amortized cost basisPost-modification amortized cost basisNumber of loansPre-modification amortized cost basisPost-modification amortized cost basis
Consumer automotive25,590 $472 $466 22,800 $340 $318 
Consumer mortgage
Mortgage Finance5 4 4 10 4 4 
Mortgage — Legacy1 — — 32 4 4 
Total consumer mortgage6 4 4 42 8 8 
Total consumer25,596 476 470 22,842 348 326 
Commercial and industrial
Automotive— — — 1 7 7 
Other1 33 33 — — — 
Total commercial1 33 33 1 7 7 
Total finance receivables and loans25,597 $509 $503 22,843 $355 $333 
The following table presents information about finance receivables and loans recorded at amortized cost that have redefaulted during the reporting period and were within 12 months or less of being modified as a TDR. Redefault is when finance receivables and loans meet the requirements for evaluation under our charge-off policy (refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for additional information) except for commercial finance receivables and loans, where redefault is defined as 90 days past due.
20212020
Three months ended March 31, ($ in millions)
Number of loansAmortized costCharge-off amountNumber of loansAmortized costCharge-off amount
Consumer automotive2,814 $33 $20 1,164 $13 $9 
Consumer mortgage
Mortgage — Legacy2——— — — 
Total consumer finance receivables and loans2,816 $33 $20 1,164 $13 $9