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DERIVATIVES (Tables)
 9 Months Ended
Sep. 30, 2020
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:
 
September 30, 2020
 
December 31, 2019
(in millions)
Notional Amount(1)
Derivative Assets
Derivative Liabilities
 
Notional Amount(1)
Derivative Assets
Derivative Liabilities
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts

$26,800


$4


$1

 

$29,846


$1


$—

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
148,161

1,761

216

 
142,386

772

133

Foreign exchange contracts
16,448

239

189

 
15,101

174

166

TBA contracts
13,161

7

34

 
—

—

—

Other contracts
8,011

275

66

 
6,868

37

23

Total derivatives not designated as hedging instruments
 
2,282

505

 
 
983

322

Gross derivative fair values
 
2,286

506

 
 
984

322

Less: Gross amounts offset in the Consolidated Balance Sheets (2)
 
(187
)
(187
)
 
 
(107
)
(107
)
Less: Cash collateral applied (2)
 
(69
)
(219
)
 
 
(70
)
(95
)
Total net derivative fair values presented in the Consolidated Balance Sheets
 

$2,030


$100

 
 

$807


$120

(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.
(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 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:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
(in millions)
2020

 
2019

 
2020

 
2019

Affected Line Item in the Consolidated Statements of Operations
Interest rate swaps hedging borrowed funds

($16
)
 

$18

 

$82

 

$122

Interest expense - borrowed funds
Hedged long-term debt attributable to the risk being hedged
17

 
(18
)
 
(78
)
 
(121
)
Interest expense - borrowed funds
Interest rate swaps hedging fixed rate loans
—

 
(10
)
 
17

 
(26
)
Interest and fees on loans and leases
Hedged fixed rate loans attributable to the risk being hedged
—

 
10

 
(17
)
 
26

Interest and fees on loans and leases
Interest rate swaps hedging debt securities available for sale
7

 
(13
)
 
(114
)
 
(13
)
Interest income - investment securities
Hedged debt securities available for sale attributable to risk being hedged
(7
)
 
13

 
114

 
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, 2020
 
December 31, 2019
(in millions)
Debt securities available for sale(1)
Long-term borrowed funds
 
Debt securities available for sale(1)
Residential mortgages
Long-term borrowed funds
Carrying amount of hedged assets

$12,314


$—

 

$15,798


$976


$—

Carrying amount of hedged liabilities
—

4,072

 
—

—

4,689

Cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged items
107

128

 
(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 $12.3 billion and $15.8 billion at September 30, 2020 and December 31, 2019, respectively) 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)
2020

 
2019

 
2020

 
2019

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

$—

 

($5
)
 

$118

 

$138

Amount of pre-tax net gains (losses) reclassified from OCI into interest income
68

 
(22
)
 
128

 
(62
)
Amount of pre-tax net (losses) gains reclassified from OCI into interest expense
(11
)
 
8

 
(22
)
 
9
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)
2020

 
2019

 
2020

 
2019

Economic hedge type:
 
 
 
 
 
 
 
 
Customer interest rate contracts

$7

 

$196

 

$1,276

 

$850

Foreign exchange and interest rate products
Customer foreign exchange contracts
80

 
(81
)
 
73

 
(162
)
Foreign exchange and interest rate products
Derivative transactions to hedge interest rate risk
1

 
(182
)
 
(1,245
)
 
(809
)
Foreign exchange and interest rate products
Derivative transactions to hedge foreign exchange risk
(126
)
 
130

 
(77
)
 
224

Foreign exchange and interest rate products
Residential loan commitments
36

 
6

 
190

 
22

Mortgage banking fees
Derivative contracts used to hedge residential loan commitments
6

 
29

 
(13
)
 
24

Mortgage banking fees
Derivative contracts used to hedge residential MSRs
2

 
92

 
335

 
208

Mortgage banking fees
Other derivative contracts
26

 
—

 
(30
)
 
—

Foreign exchange and interest rate products
Derivative transactions to hedge other derivative risk
(25
)
 
—

 
32

 
—

Foreign exchange and interest rate products
Total

$7

 

$190

 

$541

 

$357