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DERIVATIVES (Tables)
 9 Months Ended
Sep. 30, 2019
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, 2019
 
December 31, 2018
(in millions)
Notional Amount(1)
Derivative Assets
Derivative Liabilities
 
Notional Amount(1)
Derivative Assets
Derivative Liabilities
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts

$31,596


$—


$3

 

$12,050


$5


$—

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
140,652

993

172

 
117,076

301

277

Foreign exchange contracts
12,905

224

195

 
9,866

129

113

Other contracts
9,382

49

24

 
3,555

14

25

Total derivatives not designated as hedging instruments
 
1,266

391

 
 
444

415

Gross derivative fair values
 
1,266

394

 
 
449

415

Less: Gross amounts offset in the Consolidated Balance Sheets (2)
 
(122
)
(122
)
 
 
(87
)
(87
)
Less: Cash collateral applied (2)
 
(117
)
(111
)
 
 
(45
)
(36
)
Total net derivative fair values presented in the Consolidated Balance Sheets
 

$1,027


$161

 
 

$317


$292

(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 represent the impact of enforceable master netting agreements that allow the Company to net settle positive and negative positions.
Schedule of fair value hedges
The following table reflects the change in fair value of interest rate contracts, designated as fair value hedges, as well as the change in fair value of the related hedged items attributable to the risk being hedged, included in the Consolidated Statements of Operations:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
(in millions)
2019

 
2018

 
2019

 
2018

Affected Line Item in the Consolidated Statements of Operations
Change in fair value of interest rate swaps hedging borrowed funds

$18

 

($6
)
 

$122

 

($32
)
Interest expense - borrowed funds
Change in fair value of hedged long-term debt attributable to the risk being hedged
(18
)
 
7

 
(121
)
 
31

Interest expense - borrowed funds
Change in fair value of interest rate swaps hedging fixed rate loans
(10
)
 
—

 
(26
)
 
—

Interest and fees on loans and leases
Change in fair value of hedged fixed rate loans attributable to the risk being hedged
10

 
—

 
26

 
—

Interest and fees on loans and leases
Change in fair value of interest rate swaps hedging debt securities available for sale
(13
)
 
—

 
(13
)
 
—

Interest income - investment securities
Change in fair value of hedged debt securities available for sale attributable to risk being hedged
13

 
—

 
13

 
—

Interest income - investment securities

The following table reflects amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:    
 
September 30, 2019
(in millions)
Debt securities available for sale(2)
Residential mortgages
Long-term borrowed funds
Carrying amount of the hedged assets

$19,872


$985


$—

Carrying amount of the hedged liabilities(1)
—

—

5,450

Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items
13

26

62

(1)The balance reported for long-term borrowed funds includes ($1) million of cumulative hedging adjustments recorded on discontinued fair value hedging relationships.
(2)The Company designated $2.0 billion as the hedged amount (from a closed portfolio of prepayable financial assets with a carrying value of $20 billion as of September 30, 2019) in a last-of-layer hedging relationship, which commenced in the third quarter of 2019.
Schedule of effect of cash flow hedges on net income and stockholders' equity
The following table presents the pre-tax net gains (losses) recorded in the Consolidated Statements of Operations and in the Consolidated Statements of Comprehensive Income relating to derivative instruments designated as cash flow hedges:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in millions)
2019
 
2018(1)
 
2019
 
2018(1)
Amount of pre-tax net (losses) gains recognized in OCI

($5
)
 

($35
)
 

$138

 

($122
)
Amount of pre-tax net losses reclassified from OCI into interest income
(22
)
 
(17
)
 
(62
)
 
(36
)
Amount of pre-tax net gains reclassified from OCI into interest expense
8

 
3

 
9

 
11

(1) For the three and nine months ended September 30, 2018, the amount of pre-tax net gains (losses) recognized in OCI represented the effective portion of the cumulative gains or losses on cash flow hedges and ineffectiveness was reported within noninterest income.
Schedule of effect of derivative Instruments on net income
The following table presents the effect of economic hedges on noninterest income:
 
Amounts Recognized in
Noninterest Income for the
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
Affected Line Item in the Consolidated Statements of Operations
(in millions)
2019

 
2018

 
2019

 
2018

Economic hedge type:
 
 
 
 
 
 
 
 
Customer interest rate contracts

$196

 

($84
)
 

$850

 

($363
)
Foreign exchange and interest rate products
Customer foreign exchange contracts
(81
)
 
30

 
(162
)
 
(27
)
Foreign exchange and interest rate products
Derivatives transactions to hedge interest rate risk
(182
)
 
97

 
(809
)
 
403

Foreign exchange and interest rate products
Derivatives transactions to hedge foreign exchange risk
130

 
24

 
224

 
99

Foreign exchange and interest rate products
Residential loan commitments
6

 
6

 
22

 
6

Mortgage banking fees
Forward sale contracts
29

 
(13
)
 
24

 
(15
)
Mortgage banking fees
Interest rate derivative contracts used to hedge residential MSRs
92

 
(3
)
 
208

 
(3
)
Mortgage banking fees
Total

$190

 

$57

 

$357

 

$100