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DERIVATIVES (Tables)
 9 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of derivative instruments in consolidated balance sheets
The following table presents derivative instruments included on the Consolidated Balance Sheets in derivative assets and derivative liabilities:
 
September 30, 2017
 
December 31, 2016
(in millions)
Notional Amount(1)
Derivative Assets(2)
Derivative Liabilities(2)
 
Notional Amount(1)
Derivative Assets
Derivative Liabilities
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts

$17,300


$6


$—

 

$13,350


$52


$193

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
69,436

502

338

 
54,656

557

452

Foreign exchange contracts
10,147

146

142

 
8,039

134

126

Other contracts
1,256

10

5

 
1,498

16

7

Total derivatives not designated as hedging instruments
 
658

485

 
 
707

585

Gross derivative fair values
 
664

485

 
 
759

778

Less: Gross amounts offset in the Consolidated Balance Sheets (3)
 
(65
)
(65
)
 
 
(106
)
(106
)
Less: Cash collateral applied (3)
 
(3
)
(178
)
 
 
(26
)
(13
)
Total net derivative fair values presented in the Consolidated Balance Sheets
 

$596


$242

 
 

$627


$659


(1) The notional or contractual amount of interest rate derivatives and foreign exchange contracts is the amount upon which interest and other payments under the contract are based. For interest rate contracts, the notional amount is typically not exchanged. Therefore, notional amounts should not be taken as the measure of credit or market risk, as they do not measure the true economic risk of these contracts.
(2) Amounts reflect changes in the treatment of variation margin on certain centrally cleared derivatives.
(3) Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions.
Schedule of fair value hedges
The following table presents the effect of fair value hedges on other income:
 
Amounts Recognized in Other Income for the
 
Three Months Ended September 30, 2017
 
Three Months Ended September 30, 2016
(in millions)
Derivative
Hedged Item
Hedge Ineffectiveness
 
Derivative
Hedged Item
Hedge Ineffectiveness
Hedges of interest rate risk on borrowings using interest rate swaps

($5
)

$4


($1
)
 

($27
)

$25


($2
)
 
Amounts Recognized in Other Income for the
 
Nine Months Ended September 30, 2017
 
Nine Months Ended September 30, 2016
(in millions)
Derivative
Hedged Item
Hedge Ineffectiveness
 
Derivative
Hedged Item
Hedge Ineffectiveness
Hedges of interest rate risk on borrowings using interest rate swaps

$5


($5
)

$—

 

$57


($58
)

($1
)
Schedule of effect of cash flow hedges on net income and stockholders' equity
The following table presents the effect of cash flow hedges on net income and stockholders' equity:
 
Amounts Recognized for the
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in millions)
2017

 
2016

 
2017

 
2016

Effective portion of (loss) gain recognized in OCI (1)

($2
)
 

($1
)
 

$35

 

$74

Amounts reclassified from OCI to interest income (2)
3

 
23

 
23

 
66

Amounts reclassified from OCI to interest expense (2)
1

 
(8
)
 
(2
)
 
(24
)
Amounts reclassified from OCI to other income (3)
—

 
(5
)
 
—

 
(5
)
(1) The cumulative effective gains and losses on the Company’s cash flow hedging activities are included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets.
(2) This amount includes both (a) the amortization of effective gains and losses associated with the Company’s terminated cash flow hedges and (b) the current reporting period’s interest settlements realized on the Company’s active cash flow hedges. Both (a) and (b) were previously included on the accumulated other comprehensive loss line item on the Consolidated Balance Sheets and were subsequently recorded as adjustments to the interest income or expense of the underlying hedged item.
(3) This includes gains and losses attributable to previously hedged cash flows where the likelihood of occurrence of those cash flows is no longer probable.
Schedule of effect of derivative Instruments on net income
The following table presents the effect of customer derivatives and economic hedges on noninterest income:
 
Amounts Recognized in Noninterest Income for the
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in millions)
2017

 
2016

 
2017

 
2016

Customer derivative contracts
 
 
 
 
 
 
 
Customer interest rate contracts (1)

$12

 

($32
)
 

$92

 

$63

Customer foreign exchange contracts (1)
61

 
17

 
157

 
45

Residential loan commitments (2)
—

 
1

 
3

 
8

Economic hedges
 
 
 
 
 
 
 
Offsetting derivatives transactions to hedge interest rate risk on customer interest rate contracts (1)
(2
)
 
45

 
(58
)
 
(31
)
Offsetting derivatives transactions to hedge foreign exchange risk on customer foreign exchange contracts (1)
(55
)
 
(19
)
 
(140
)
 
(46
)
Forward sale contracts (2)
(1
)
 
4

 
(7
)
 
(6
)
Total

$15

 

$16

 

$47

 

$33

(1) Reported in foreign exchange and interest rate products on the Consolidated Statements of Operations.
(2) Reported in mortgage banking fees on the Consolidated Statements of Operations.