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DERIVATIVES (Tables)
 12 Months Ended
Dec. 31, 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:
 
December 31, 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

$29,846


$1


$—

 

$12,050


$5


$—

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
142,386

772

133

 
117,076

301

277

Foreign exchange contracts
15,101

174

166

 
9,866

129

113

Other contracts
6,868

37

23

 
3,555

14

25

Total derivatives not designated as hedging instruments
 
983

322

 
 
444

415

Gross derivative fair values
 
984

322

 
 
449

415

Less: Gross amounts offset in the Consolidated Balance Sheets (2)
 
(107
)
(107
)
 
 
(87
)
(87
)
Less: Cash collateral applied (2)
 
(70
)
(95
)
 
 
(45
)
(36
)
Total net derivative fair values presented in the Consolidated Balance Sheets
 

$807


$120

 
 

$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 as well as collateral paid and received.
Schedule of fair value hedges
The following table presents 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:
 
Year Ended December 31,
 
(in millions)
2019

 
2018

 
2017
Affected Line Item in the Consolidated Statements of Operations
Change in fair value of interest rate swaps hedging borrowed funds

$107

 

$8

 

($26
)
Interest expense - long-term borrowed funds
Change in fair value of hedged long-term debt attributable to the risk being hedged
(107
)
 
(9
)
 
27

Interest expense - long-term borrowed funds
Change in fair value of interest rate swaps hedging fixed rate loans
(17
)
 
—

 
—

Interest and fees on loans and leases
Change in fair value of hedged fixed rate loans attributable to the risk being hedged
17

 
—

 
—

Interest and fees on loans and leases
Change in fair value of interest rate swaps hedging debt securities available for sale
8

 
—

 
—

Interest income - investment securities
Change in fair value of hedged debt securities available for sale attributable to risk being hedged
(8
)
 
—

 
—

Interest income - investment securities
The following table reflects amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges:    
 
December 31, 2019
(in millions)
Debt securities available for sale(1)
Residential mortgages
Long-term borrowed funds
Carrying amount of hedged assets

$15,798


$976


$—

Carrying amount of hedged liabilities
—

—

4,689

Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items
(8
)
17

50

(1) The Company designated $2.0 billion as the hedged amount (from a closed portfolio of prepayable financial assets with a carrying value of $15.8 billion as of December 31, 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:
 
Amounts Recognized for the Year Ended December 31,
(in millions)
2019

 
2018

 
2017

Amount of pre-tax net gains (losses) recognized in OCI

$138

 

($44
)
 

($23
)
Amount of pre-tax net losses reclassified from OCI into interest income
(68
)
 
(55
)
 
25

Amount of pre-tax net gains reclassified from OCI into interest expense
11

 
12

 
—
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 Year Ended December 31,
Affected Line Item in the Consolidated Statements of Operations
(in millions)
2019

 
2018

 
2017

Economic hedge type:
 
 
 
 
 
 
Customer interest rate contracts

$687

 

$5

 

$5

Foreign exchange and interest rate products
Customer foreign exchange contracts
(166
)
 
(54
)
 
172

Foreign exchange and interest rate products
Derivatives transactions to hedge interest rate risk
(620
)
 
43

 
46

Foreign exchange and interest rate products
Derivatives transactions to hedge foreign exchange risk
200

 
158

 
(151
)
Foreign exchange and interest rate products
Residential loan commitments
8

 
(3
)
 
2

Mortgage banking fees
Forward sale contracts
20

 
21

 
(8
)
Mortgage banking fees
Interest rate derivative contracts used to hedge residential MSRs(1)
134

 
35

 
—

Mortgage banking fees
Total

$263

 

$205

 

$66

 

(1)Includes ($5) million related to interest rate derivative contracts used to hedge residential MSRs valued at LOCOM for the year ended December 31, 2019.