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Fair Value (Tables)
 9 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis
The following tables display the assets and liabilities measured at fair value on a recurring basis including financial instruments elected for the fair value option. We often economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The tables below display the hedges separately from the hedged items; therefore, they do not directly display the impact of our risk-management activities.
Recurring fair value measurements
September 30, 2021 ($ in millions)
Level 1Level 2Level 3Total
Assets
Investment securities
Equity securities (a)$1,034 $— $11 $1,045 
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies
1,743 — — 1,743 
U.S. States and political subdivisions
— 851 7 858 
Foreign government15 146 — 161 
Agency mortgage-backed residential
— 19,706 — 19,706 
Mortgage-backed residential
— 3,479 — 3,479 
Agency mortgage-backed commercial— 4,736 — 4,736 
Asset-backed— 547 — 547 
Corporate debt
— 1,892 — 1,892 
Total available-for-sale securities1,758 31,357 7 33,122 
Mortgage loans held-for-sale (b)
— 102 — 102 
Finance receivables and loans, net
Consumer other (b)— — 8 8 
Derivative contracts in a receivable position
Interest rate— 2 5 7 
Foreign currency— 1 — 1 
Equity contracts1 — — 1 
Total derivative contracts in a receivable position
1 3 5 9 
Total assets$2,793 $31,462 $31 $34,286 
Liabilities
Accrued expenses and other liabilities
Derivative contracts in a payable position
Interest rate$— $— $2 $2 
Credit contracts— — 55 55 
Equity contracts4 — — 4 
Total derivative contracts in a payable position
4 — 57 61 
Total liabilities$4 $— $57 $61 
(a)Our direct investment in any one industry did not exceed 9%.
(b)Carried at fair value due to fair value option elections.
Recurring fair value measurements
December 31, 2020 ($ in millions)
Level 1Level 2Level 3Total
Assets
Investment securities
Equity securities (a)$1,064 $— $7 $1,071 
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies
803 — — 803 
U.S. States and political subdivisions
— 1,088 7 1,095 
Foreign government17 159 — 176 
Agency mortgage-backed residential
— 18,588 — 18,588 
Mortgage-backed residential
— 2,640 — 2,640 
Agency mortgage-backed commercial— 4,189 — 4,189 
Asset-backed— 425 — 425 
Corporate debt
— 1,914 — 1,914 
Total available-for-sale securities820 29,003 7 29,830 
Mortgage loans held-for-sale (b)
— — 91 91 
Finance receivables and loans, net
Consumer other (b)— — 8 8 
Derivative contracts in a receivable position
Interest rate— — 16 16 
Foreign currency— 1 — 1 
Total derivative contracts in a receivable position
— 1 16 17 
Total assets$1,884 $29,004 $129 $31,017 
Liabilities
Accrued expenses and other liabilities
Derivative contracts in a payable position
Foreign currency$— $1 $— $1 
Credit contracts— — 28 28 
Equity contracts4 — — 4 
Total derivative contracts in a payable position
4 1 28 33 
Total liabilities$4 $1 $28 $33 
(a)Our direct investment in any one industry did not exceed 11%.
(b)Carried at fair value due to fair value option elections.
Fair Value, Assets Measured on a Recurring Basis, Unobservable Input Reconciliation
The following tables present the reconciliation for all Level 3 assets and liabilities measured at fair value on a recurring basis. We often economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The Level 3 items presented below may be hedged by derivatives and other financial instruments that are classified as Level 1 or Level 2. Thus, the following tables do not fully reflect the impact of our risk-management activities.
Equity securities (a)Available-for-sale securitiesMortgage loans held-for-sale (b) (c)Finance receivables and loans, net (b) (d)Interests retained in financial asset sales
($ in millions)2021202020212020202120202021202020212020
Assets
Fair value at July 1,$9 $5 $7 $5 $97 $91 $8 $8 $— $1 
Net realized/unrealized gains
Included in earnings1 1 — — 15 22 1 2 — — 
Included in OCI— — — — — — — — — — 
Purchases— — — 2 789 854 4 5 — — 
Sales— — — — (799)(811)— — — — 
Issuances— — — — — — — — — — 
Settlements— — — — — — (5)(7)— (1)
Transfers into Level 31 — — — — — — — — — 
Transfers out of Level 3 (e)— — — — (102)— — — — — 
Fair value at September 30,$11 $6 $7 $7 $— $156 $8 $8 $— $— 
Net unrealized gains still held at September 30,
Included in earnings$1 $1 $— $— $— $— $— $— $— $— 
Included in OCI— — — — — — — — — — 
(a)Net realized/unrealized gains are reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Carried at fair value due to fair value option elections.
(c)Net realized/unrealized gains are reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
(d)Net realized/unrealized gains are reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income.
(e)During the three months ended September 30, 2021, mortgage loans held for sale were transferred out of Level 3 and into Level 2 of the fair value hierarchy. This transfer reflects that the underlying assets are valued based on observable prices in an active market for similar assets, and is deemed to have occurred at the end of the reporting period.
Derivative liabilities, net of derivative assets
($ in millions)2021 (a)2020 (b)
Liabilities
Fair value at July 1,$37 $(12)
Net realized/unrealized losses (gains)
Included in earnings12 (6)
Included in OCI— — 
Purchases— — 
Sales— — 
Issuances1 — 
Settlements— — 
Transfers into Level 3— — 
Transfers out of Level 3 (c)2 — 
Fair value at September 30,$52 $(18)
Net unrealized losses (gains) still held at September 30,
Included in earnings$10 $(6)
Included in OCI— — 
(a)Net realized/unrealized losses are reported as gain on mortgage and automotive loans, net, and other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Net realized/unrealized gains are reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
(c)During the three months ended September 30, 2021, certain derivative assets were transferred out of Level 3 and into Level 2 of the fair value hierarchy. This transfer reflects that the underlying assets are valued based on observable prices in an active market for similar assets, and is deemed to have occurred at the end of the reporting period.
Equity securities (a)Available-for-sale securitiesMortgage loans held-for-sale (b) (c)Finance receivables and loans, net (b) (d)Interests retained in financial asset sales
($ in millions)2021202020212020202120202021202020212020
Assets
Fair value at January 1,$7 $8 $7 $2 $91 $30 $8 $11 $— $2 
Net realized/unrealized gains (losses)
Included in earnings5 (2)— — 64 35 2 2 — — 
Included in OCI— — — — — — — — — — 
Purchases— — — 5 2,640 1,832 12 14 — — 
Sales(2)— — — (2,693)(1,741)— — — — 
Issuances— — — — — — — — — — 
Settlements— — — — — — (14)(19)— (2)
Transfers into Level 31 — — — — — — — — — 
Transfers out of Level 3 (e)— — — — (102)— — — — — 
Fair value at September 30,$11 $6 $7 $7 $— $156 $8 $8 $— $— 
Net unrealized gains (losses) still held at September 30,
Included in earnings$5 $(2)$— $— $— $2 $— $— $— $— 
Included in OCI— — — — — — — — — — 
(a)Net realized/unrealized gains (losses) are reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Carried at fair value due to fair value option elections.
(c)Net realized/unrealized gains are reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
(d)Net realized/unrealized gains are reported as other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income.
(e)During the nine months ended September 30, 2021, mortgage loans held for sale were transferred out of Level 3 and into Level 2 of the fair value hierarchy. This transfer reflects that the underlying assets are valued based on observable prices in an active market for similar assets, and is deemed to have occurred at the end of the reporting period.
Derivative liabilities, net of derivative assets
($ in millions)2021 (a)2020 (b)
Liabilities
Fair value at January 1,$12 $(2)
Net realized/unrealized losses (gains)
Included in earnings34 (16)
Included in OCI— — 
Purchases— — 
Sales— — 
Issuances4 — 
Settlements— — 
Transfers into Level 3— — 
Transfers out of Level 3 (c)2 — 
Fair value at September 30,$52 $(18)
Net unrealized losses (gains) still held at September 30,
Included in earnings$25 $(16)
Included in OCI— — 
(a)Net realized/unrealized losses are reported as gain on mortgage and automotive loans, net, and other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Net realized/unrealized gains are reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
(c)During the nine months ended September 30, 2021, certain derivative assets were transferred out of Level 3 and into Level 2 of the fair value hierarchy. This transfer reflects that the underlying assets are valued based on observable prices in an active market for similar assets, and is deemed to have occurred at the end of the reporting period.
Fair Value Measurements - Nonrecurring Basis
The following tables display assets and liabilities measured at fair value on a nonrecurring basis and still held at September 30, 2021, and December 31, 2020, respectively. The amounts are generally as of the end of each period presented, which approximate the fair value measurements that occurred during each period.
Nonrecurring fair value measurements
Lower-of-cost-or-fair-value reserve, valuation reserve, or cumulative adjustments
Total gain (loss) included in earnings
September 30, 2021 ($ in millions)
Level 1
Level 2
Level 3
Total
Assets
Loans held-for-sale, net$— $— $354 $354 $— n/m(a)
Commercial finance receivables and loans, net (b)
Automotive
— — 27 27 (2)n/m(a)
Other
— — 67 67 (36)n/m(a)
Total commercial finance receivables and loans, net
— — 94 94 (38)n/m(a)
Other assets
Nonmarketable equity investments2 — 8 10 1 n/m(a)
Repossessed and foreclosed assets (c)— — 3 3 — n/m(a)
Total assets
$2 $— $459 $461 $(37)n/m
n/m = not meaningful
(a)We consider the applicable valuation allowance, loan loss allowance, or cumulative impairment to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation reserve, loan loss allowance, or cumulative adjustment.
(b)Represents collateral-dependent loans held for investment for which a nonrecurring measurement was made. The related allowance for loan losses represents the cumulative fair value adjustments for those specific receivables.
(c)The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.
Nonrecurring fair value measurementsLower-of-cost-or-fair-value reserve, valuation reserve, or cumulative adjustmentsTotal gain (loss) included in earnings
December 31, 2020 ($ in millions)
Level 1Level 2Level 3Total
Assets
Loans held-for-sale, net$— $— $315 $315 $— n/m(a)
Commercial finance receivables and loans, net (b)
Automotive— — 27 27 (5)n/m(a)
Other— — 54 54 (20)n/m(a)
Total commercial finance receivables and loans, net— — 81 81 (25)n/m(a)
Other assets
Nonmarketable equity investments (c)— 7 118 125 88 n/m(a)
Repossessed and foreclosed assets (d)— — 9 9 (1)n/m(a)
Total assets$— $7 $523 $530 $62 n/m
n/m = not meaningful
(a)We consider the applicable valuation allowance, loan loss allowance, or cumulative impairment to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation reserve, loan loss allowance, or cumulative adjustment.
(b)Represents collateral-dependent loans held for investment for which a nonrecurring measurement was made. The related allowance for loan losses represents the cumulative fair value adjustments for those specific receivables.
(c)Primarily relates to an investment in one entity for which there was a subsequent funding round. This subsequent funding round resulted in an observable price change in the value of our investment in the entity. Refer to Note 13 to the Consolidated Financial Statements in our 2020 Annual Report on Form 10-K for further discussion.
(d)The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.
Fair Value, by Balance Sheet Grouping
The following table presents the carrying and estimated fair value of financial instruments, except for those recorded at fair value on a recurring basis presented in the previous section of this note titled Recurring Fair Value. When possible, we use quoted market prices to determine fair value. Where quoted market prices are not available, the fair value is internally derived based on appropriate valuation methodologies with respect to the amount and timing of future cash flows and estimated discount rates. However, considerable judgment is required in interpreting current market data to develop the market assumptions and inputs necessary to estimate fair value. As such, the actual amount received to sell an asset or the amount paid to settle a liability could differ from our estimates. Fair value information presented herein was based on information available at September 30, 2021, and December 31, 2020.
Estimated fair value
($ in millions)
Carrying value
Level 1
Level 2
Level 3
Total
September 30, 2021
Financial assets
Held-to-maturity securities
$1,150 $— $1,193 $— $1,193 
Loans held-for-sale, net
354 — — 354 354 
Finance receivables and loans, net
111,315 — — 118,484 118,484 
FHLB/FRB stock (a)
673 — 673 — 673 
Financial liabilities
Deposit liabilities
$43,242 $— $— $43,594 $43,594 
Long-term debt
14,946 — 12,643 4,992 17,635 
December 31, 2020
Financial assets
Held-to-maturity securities$1,253 $— $1,331 $— $1,331 
Loans held-for-sale, net315 — — 315 315 
Finance receivables and loans, net115,243 — — 122,156 122,156 
FHLB/FRB stock (a)725 — 725 — 725 
Financial liabilities
Deposit liabilities$55,210 $— $— $55,932 $55,932 
Short-term borrowings2,136 — — 2,136 2,136 
Long-term debt22,006 — 19,161 6,310 25,471 
(a)Included in other assets on our Condensed Consolidated Balance Sheet.