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Finance Receivables (Tables)

12 Months Ended

Dec. 31, 2020

Accounts, Notes, Loans and Financing Receivable [Line Items]


	December 31, 2020		December 31, 2019
Retail finance receivables
Retail finance receivables, net of fees(a)	$	51,288	$	42,268
Less: allowance for loan losses	(1,915)		(866)
Total retail finance receivables, net	49,373		41,402
Commercial finance receivables
Commercial finance receivables, net of fees(b)	9,080		12,149
Less: allowance for loan losses	(63)		(78)
Total commercial finance receivables, net	9,017		12,071
Total finance receivables, net	$	58,390	$	53,473
Fair value utilizing Level 2 inputs	$	9,017	$	12,071
Fair value utilizing Level 3 inputs	$	51,645	$	42,012

________________

(a)Net of unearned income, unamortized premiums and discounts, and deferred fees and costs.

(b)Net of dealer cash management balances of $1.4 billion and $1.2 billion at December 31, 2020 and 2019.

Allowance for Credit Losses on Financing Receivables

A summary of the activity in the allowance for retail loan losses is as follows:


	Years Ended December 31,
	2020		2019		2018
Allowance for retail loan losses beginning balance	$	866	$	844	$	889
Impact of adopting ASU 2016-13 (Note 1)	801		—		—
Provision for loan losses	880		690		624
Charge-offs	(1,149)		(1,218)		(1,196)
Recoveries	537		548		536
Foreign currency translation	(20)		2		(9)
Allowance for retail loan losses ending balance	$	1,915	$	866	$	844

Financing Receivable Credit Quality Indicators

A summary of the amortized cost of the retail finance receivables by FICO score or its equivalent, determined at origination, for each vintage of the retail finance receivables portfolio at December 31, 2020 is as follows:


	Year of Origination
	2020		2019		2018		2017		2016		Prior		Total		Percent
Prime - FICO Score 680 and greater	$	18,685	$	7,033	$	4,491	$	1,917	$	555	$	119	$	32,800	64.0	%
Near-prime - FICO Score 620 to 679	3,695		2,097		1,232		603		225		83		7,935		15.4
Sub-prime - FICO Score less than 620	3,803		2,920		1,740		1,173		610		307		10,553		20.6
Retail finance receivables, net of fees	$	26,183	$	12,050	$	7,463	$	3,693	$	1,390	$	509	$	51,288	100.0	%

Effective January 1, 2020, we updated our commercial risk model and our risk rating categories as follows:


Dealer Risk Rating						Description
I						Performing accounts with strong to acceptable financial metrics with at least satisfactory capacity to meet financial commitments.
II						Performing accounts experiencing potential weakness in financial metrics and repayment prospects resulting in increased monitoring.
III						Non-Performing accounts with inadequate paying capacity for current obligations and that have the distinct possibility of creating a loss if deficiencies are not corrected.
IV						Non-Performing accounts with inadequate paying capacity for current obligations and inherent weaknesses that make collection or liquidation in full highly questionable or improbable.

The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables at December 31, 2020:


	Year of Origination(a)
Dealer Risk Rating	Revolving		2020		2019		2018		2017		2016		Prior		Total		Percent
I	$	7,210	$	579	$	179	$	77	$	110	$	43	$	19	$	8,217	90.5	%
II	508		2		18		11		15		18		34		606		6.7
III	203		—		8		29		2		11		—		253		2.8
IV	—		—		—		—		—		—		4		4		—
Balance at end of period	$	7,921	$	581	$	205	$	117	$	127	$	72	$	57	$	9,080	100.0	%

________________

(a) Floorplan advances comprise 97% of the total revolving balance. Dealer term loans are presented by year of origination.

Past Due Financing Receivables

The following table is a consolidated summary of the delinquency status of the outstanding amortized cost of retail finance receivables for each vintage of the portfolio at December 31, 2020:


	Year of Origination
	2020		2019		2018		2017		2016		Prior		Total		Percent
0 - 30 days	$	25,894	$	11,591	$	7,131	$	3,454	$	1,249	$	421	$	49,740	97.0	%

31 - 60 days	210		325		235		170		102		61		1,103		2.1
Greater than 60 days	72		123		90		64		37		26		412		0.8
Finance receivables more than 30 days delinquent	282		448		325		234		139		87		1,515		2.9
In repossession	7		11		7		5		2		1		33		0.1
Finance receivables more than 30 days delinquent or in repossession	289		459		332		239		141		88		1,548		3.0
Retail finance receivables, net of fees	$	26,183	$	12,050	$	7,463	$	3,693	$	1,390	$	509	$	51,288	100.0	%

Troubled Debt Restructurings on Financing Receivables

Additional TDR activity is presented below:


	Years Ended December 31,
	2020		2019		2018
Number of loans classified as TDRs during the period	57,524		69,863		69,298
Outstanding amortized cost of loans classified as TDRs during the period	$	1,057	$	1,269	$	1,267