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Finance Receivables and Loans, Net
 6 Months Ended
Jun. 30, 2021
Receivables [Abstract]  
Finance Receivables and Loans, Net Finance Receivables and Loans, Net
The composition of finance receivables and loans reported at amortized cost basis was as follows.
($ in millions)June 30, 2021December 31, 2020
Consumer automotive (a)$75,951 $73,668 
Consumer mortgage
Mortgage Finance (b)13,629 14,632 
Mortgage — Legacy (c)429 495 
Total consumer mortgage14,058 15,127 
Consumer other (d)640 407 
Total consumer90,649 89,202 
Commercial
Commercial and industrial
Automotive11,303 19,082 
Other5,442 5,242 
Commercial real estate4,823 5,008 
Total commercial21,568 29,332 
Total finance receivables and loans (e) (f)$112,217 $118,534 
(a)Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 18 for additional information.
(b)Includes loans originated as interest-only mortgage loans of $6 million and $8 million at June 30, 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 $25 million and $30 million at June 30, 2021, and December 31, 2020, respectively, of which 99% have exited the interest-only period.
(d)Includes $8 million of finance receivables at both June 30, 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 $2.2 billion and $2.0 billion at June 30, 2021, and December 31, 2020, respectively.
(f)Totals do not include accrued interest receivable, which was $475 million and $587 million at June 30, 2021, and December 31, 2020, respectively. Accrued interest receivable is included in other assets on our Condensed Consolidated Balance Sheet.
The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans for the three months and six months ended June 30, 2021.
Three months ended June 30, 2021 ($ in millions)
Consumer automotiveConsumer mortgageConsumer other (a)CommercialTotal
Allowance at April 1, 2021$2,809 $26 $69 $248 $3,152 
Charge-offs (b)(183)(2)(5)(7)(197)
Recoveries188 3 1 11 203 
Net charge-offs5 1 (4)4 6 
Provision for credit losses(12)(4)8 (24)(32)
Other— 1 (1)— — 
Allowance at June 30, 2021$2,802 $24 $72 $228 $3,126 
(a)Excludes $8 million of finance receivables at both April 1, 2021, and June 30, 2021, for which we have elected the fair value option.
(b)Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for information regarding our charge-off policies.
Six months ended June 30, 2021 ($ in millions)
Consumer automotiveConsumer mortgageConsumer other (a)CommercialTotal
Allowance at January 1, 2021$2,902 $33 $73 $275 $3,283 
Charge-offs (b)(467)(4)(13)(21)(505)
Recoveries375 6 1 11 393 
Net charge-offs(92)2 (12)(10)(112)
Provision for credit losses(8)(11)11 (37)(45)
Other— — — — — 
Allowance at June 30, 2021$2,802 $24 $72 $228 $3,126 
(a)Excludes $8 million of finance receivables at both June 30, 2021, and December 31, 2020, for which we have elected the fair value option.
(b)Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for information regarding our charge-off policies.
Three months ended June 30, 2020 ($ in millions)
Consumer automotiveConsumer mortgageConsumer other (a)CommercialTotal
Allowance at April 1, 2020$2,833 $39 $45 $328 $3,245 
Charge-offs (b)(245)(2)(4)(40)(291)
Recoveries108 4 — 1 113 
Net charge-offs(137)2 (4)(39)(178)
Provision for credit losses269 1 6 11 287 
Other(2)— 2 — — 
Allowance at June 30, 2020$2,963 $42 $49 $300 $3,354 
(a)Excludes $10 million and $8 million of finance receivables at April 1, 2020, and June 30, 2020, respectively, for which we have elected the fair value option.
(b)Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for information regarding our charge-off policies.
Six months ended June 30, 2020 ($ 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)(618)(5)(9)(43)(675)
Recoveries219 9 1 2 231 
Net charge-offs(399)4 (8)(41)(444)
Provision for credit losses954 (2)31 207 1,190 
Other(1)— 1 (1)(1)
Allowance at June 30, 2020$2,963 $42 $49 $300 $3,354 
(a)Excludes $8 million and $11 million of finance receivables at June 30, 2020, and December 31, 2019, respectively, for which we have elected the fair value option.
(b)Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for information regarding our charge-off policies.
The following table presents information about significant sales of finance receivables and loans and transfers of finance receivables and loans from held for investment to held for sale based on net carrying value.
Three months ended June 30,Six months ended June 30,
($ in millions)2021202020212020
Consumer mortgage$84 — $413 $— 
Total sales and transfers$84 $— $413 $— 
The following table presents information about significant purchases of finance receivables and loans based on unpaid principal balance at the time of purchase.
Three months ended June 30,Six months ended June 30,
($ in millions)2021202020212020
Consumer automotive$727 $635 $1,304 $995 
Consumer mortgage1,744 1,870 1,932 2,354 
Commercial— 1 — 1 
Total purchases of finance receivables and loans$2,471 $2,506 $3,236 $3,350 
Nonaccrual Loans
The following tables present the amortized cost of our finance receivables and loans on nonaccrual status. All consumer or commercial finance receivables and loans that were 90 days or more past due were on nonaccrual status as of June 30, 2021, and December 31, 2020.
June 30, 2021
($ in millions)Nonaccrual status at Jan. 1, 2021Nonaccrual status at Apr. 1, 2021Nonaccrual statusNonaccrual with no allowance (a)
Consumer automotive$1,256 $1,173 $1,033 $472 
Consumer mortgage
Mortgage Finance67 63 49 26 
Mortgage — Legacy35 32 27 25 
Total consumer mortgage102 95 76 51 
Consumer other3 2 2 — 
Total consumer1,361 1,270 1,111 523 
Commercial
Commercial and industrial
Automotive40 17 33 4 
Other116 150 133 51 
Commercial real estate5 2 6 6 
Total commercial161 169 172 61 
Total finance receivables and loans$1,522 $1,439 $1,283 $584 
(a)Represents a component of nonaccrual status at end of period.
December 31, 2020
($ in millions)Nonaccrual status at Jan. 1, 2020Nonaccrual status at Apr. 1, 2020Nonaccrual statusNonaccrual with no allowance (a)
Consumer automotive$762 $1,077 $1,256 $604 
Consumer mortgage
Mortgage Finance17 22 67 18 
Mortgage — Legacy40 40 35 28 
Total consumer mortgage57 62 102 46 
Consumer other2 1 3 — 
Total consumer821 1,140 1,361 650 
Commercial
Commercial and industrial
Automotive73 86 40 10 
Other138 162 116 41 
Commercial real estate4 8 5 5 
Total commercial215 256 161 56 
Total finance receivables and loans$1,036 $1,396 $1,522 $706 
(a)Represents a component of nonaccrual status at end of period.
We recorded interest income from cash payments associated with finance receivables and loans in nonaccrual status of $3 million and $5 million for the three months and six months ended June 30, 2021, respectively, compared to $4 million and $6 million for the three months and six months ended June 30, 2020, respectively.
Credit Quality Indicators
We evaluate the credit quality of our consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan. In accordance with regulatory guidance, if borrowers are less than 30 days past due on their loans and enter into loan modifications offered as a result of COVID-19, their loans generally continue to be considered performing loans and continue to accrue interest during the period of the loan modification. For borrowers who are 30 days or more past due when entering into loan modifications offered as a result of COVID-19, we evaluate the loan modifications under our existing troubled debt restructuring framework, and where such a loan modification would result in a concession to a borrower experiencing financial difficulty, the loan is accounted for as a TDR and generally will not accrue interest.
The following tables present the amortized cost basis of our consumer finance receivables and loans by credit quality indicator based on delinquency status and origination year.
Origination yearRevolving loans converted to term
June 30, 2021 ($ in millions)
202120202019201820172016 and priorRevolving loansTotal
Consumer automotive
Current$19,187 $22,144 $15,212 $9,239 $5,073 $3,344 $— $— $74,199 
30–59 days past due69 280 332 244 157 139 — — 1,221 
60–89 days past due14 71 94 66 40 33 — — 318 
90 or more days past due4 35 58 45 33 38 — — 213 
Total consumer automotive19,274 22,530 15,696 9,594 5,303 3,554 — — 75,951 
Consumer mortgage
Mortgage Finance
Current3,754 2,862 1,430 1,059 1,420 3,002 — — 13,527 
30–59 days past due22 8 5 3 5 17 — — 60 
60–89 days past due— — — 2 — 3 — — 5 
90 or more days past due— 1 3 9 4 20 — — 37 
Total Mortgage Finance3,776 2,871 1,438 1,073 1,429 3,042 — — 13,629 
Mortgage — Legacy
Current— — — — — 98 274 30 402 
30–59 days past due— — — — — 2 2 — 4 
60–89 days past due— — — — — 2 — — 2 
90 or more days past due— — — — — 16 4 1 21 
Total Mortgage — Legacy— — — — — 118 280 31 429 
Total consumer mortgage3,776 2,871 1,438 1,073 1,429 3,160 280 31 14,058 
Consumer other
Current376 205 31 8 2 — — — 622 
30–59 days past due2 2 1 — — — — — 5 
60–89 days past due1 2 — — — — — — 3 
90 or more days past due1 1 — — — — — — 2 
Total consumer other (a)380 210 32 8 2 — — — 632 
Total consumer$23,430 $25,611 $17,166 $10,675 $6,734 $6,714 $280 $31 $90,641 
(a)Excludes $8 million of finance receivables at June 30, 2021, for which we have elected the fair value option.
Origination yearRevolving loans converted to term
December 31, 2020 ($ 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 $8 million of finance receivables at December 31, 2020, for which we have elected the fair value option.
We evaluate the credit quality of our commercial loan portfolio using regulatory risk ratings, which are based on relevant information about the borrower’s financial condition, including current financial information, historical payment experience, credit documentation, and current economic trends, among other factors. We use the following definitions for risk rankings.
•Special mention — Loans that have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.
•Substandard — Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. These loans have a well-defined weakness or weakness that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
•Doubtful — Loans that have all the weaknesses inherent in those classified as substandard, with the additional characteristic that the weaknesses make collection or liquidation in full, based on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
The regulatory risk classification utilized is influenced by internal credit risk ratings, which are based on a variety of factors. A borrower’s internal credit risk rating is updated at least annually, and more frequently when a borrower’s credit profile changes, including when we become aware of potential credit deterioration. The following tables present the amortized cost basis of our commercial finance receivables and loans by credit quality indicator based on risk rating and origination year.
Origination yearRevolving loans converted to term
June 30, 2021 ($ in millions)
202120202019201820172016 and priorRevolving loansTotal
Commercial and industrial
Automotive
Pass$218 $353 $201 $45 $52 $73 $9,261 $— $10,203 
Special mention12 9 23 41 38 37 887 — 1,047 
Substandard— 1 — 1 — 2 49 — 53 
Doubtful— — — — — — — — — 
Total automotive230 363 224 87 90 112 10,197 — 11,303 
Other
Pass297 457 556 194 90 218 2,675 86 4,573 
Special mention— 75 139 27 86 99 71 17 514 
Substandard— 32 25 — 138 90 17 25 327 
Doubtful— — — — — 27 — — 27 
Loss— — — — 1 — — — 1 
Total other297 564 720 221 315 434 2,763 128 5,442 
Commercial real estate
Pass452 1,111 867 731 457 869 3 4 4,494 
Special mention— 58 131 45 31 49 — — 314 
Substandard— — — — — 13 — — 13 
Doubtful— — — — — 2 — — 2 
Total commercial real estate452 1,169 998 776 488 933 3 4 4,823 
Total commercial$979 $2,096 $1,942 $1,084 $893 $1,479 $12,963 $132 $21,568 
Origination yearRevolving loans converted to term
December 31, 2020 ($ 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
June 30, 2021
Commercial
Commercial and industrial
Automotive$— $— $— $— $11,303 $11,303 
Other— — — — 5,442 5,442 
Commercial real estate— — 2 2 4,821 4,823 
Total commercial$— $— $2 $2 $21,566 $21,568 
December 31, 2020
Commercial
Commercial and industrial
Automotive$— $— $— $— $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 June 30, 2021, and December 31, 2020, respectively.
Our consumer automotive portfolio accounts for the majority of the year-over-year increase in TDR balances. TDRs in our consumer automotive 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 $21 million and $14 million at June 30, 2021, and December 31, 2020, respectively. Refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for additional information.
The following tables present information related to finance receivables and loans recorded at amortized cost modified in connection with a TDR during the period.
20212020
Three months ended June 30, ($ in millions)
Number of loansPre-modification amortized cost basisPost-modification amortized cost basisNumber of loansPre-modification amortized cost basisPost-modification amortized cost basis
Consumer automotive14,670 $271 $267 21,293 $323 $297 
Consumer mortgage
Mortgage Finance10 4 5 19 11 11 
Mortgage — Legacy3 1 1 23 3 3 
Total consumer mortgage13 5 6 42 14 14 
Total consumer14,683 276 273 21,335 337 311 
Commercial and industrial
Automotive1 1 1 2 31 26 
Other— — — 1 23 7 
Commercial real estate1 3 3 — — — 
Total commercial2 4 4 3 54 33 
Total finance receivables and loans14,685 $280 $277 21,338 $391 $344 
20212020
Six months ended June 30, ($ in millions)
Number of loansPre-modification amortized cost basisPost-modification amortized cost basisNumber of loansPre-modification amortized cost basisPost-modification amortized cost basis
Consumer automotive40,260 $743 $733 44,093 $663 $615 
Consumer mortgage
Mortgage Finance15 8 9 29 15 15 
Mortgage — Legacy4 1 1 55 7 7 
Total consumer mortgage19 9 10 84 22 22 
Total consumer40,279 752 743 44,177 685 637 
Commercial and industrial
Automotive1 1 1 3 38 33 
Other1 33 33 1 23 7 
Commercial real estate1 3 3 — — — 
Total commercial3 37 37 4 61 40 
Total finance receivables and loans40,282 $789 $780 44,181 $746 $677 
The following tables present information about finance receivables and loans recorded at amortized cost that have redefaulted during the reporting period and were within 12 months or less of being modified as a TDR. Redefault is when finance receivables and loans meet the requirements for evaluation under our charge-off policy (refer to Note 1 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for additional information) except for commercial finance receivables and loans, where redefault is defined as 90 days past due.
20212020
Three months ended June 30, ($ in millions)
Number of loansAmortized costCharge-off amountNumber of loansAmortized costCharge-off amount
Consumer automotive1,751 $22 $11 1,119 $11 $8 
Consumer mortgage
Mortgage Finance1——— — — 
Mortgage — Legacy2——— — — 
Total consumer finance receivables and loans1,754 $22 $11 1,119 $11 $8 
20212020
Six months ended June 30, ($ in millions)
Number of loansAmortized costCharge-off amountNumber of loansAmortized costCharge-off amount
Consumer automotive4,565 $55 $31 2,283 $24 $17 
Consumer mortgage
Mortgage Finance1——— — — 
Mortgage — Legacy4——— — — 
Total consumer finance receivables and loans4,570 $55 $31 2,283 $24 $17