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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments (Tables)
 9 Months Ended
Sep. 30, 2021
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Allowance for Credit Losses on Financing Receivables The table below summarizes changes in the allowance for credit losses and reserve for unfunded lending commitments by portfolio segment for the three and nine months ended September 30, 2021 and 2020. Our allowance for credit losses decreased by $4.0 billion to $11.6 billion as of September 30, 2021 from December 31, 2020, primarily driven by strong credit performance and improved economic outlook.
Table 4.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
Three Months Ended September 30, 2021
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of June 30, 2021$8,873 $2,203 $1,270 $12,346 
Charge-offs
(735)(264)(20)(1,019)
Recoveries(1)
369 213 11 593 
Net charge-offs(366)(51)(9)(426)
Provision (benefit) for credit losses(198)(91)(55)(344)
Allowance build (release) for credit losses(564)(142)(64)(770)
Other changes(4)
(3)0 0 (3)
Balance as of September 30, 20218,306 2,061 1,206 11,573 
Reserve for unfunded lending commitments:
Balance as of June 30, 20210 0 164 164 
Provision (benefit) for losses on unfunded lending commitments0 0 2 2 
Balance as of September 30, 20210 0 166 166 
Combined allowance and reserve as of September 30, 2021$8,306 $2,061 $1,372 $11,739 
Nine Months Ended September 30, 2021
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of December 31, 2020$11,191 $2,715 $1,658 $15,564 
Charge-offs
(2,695)(866)(47)(3,608)
Recoveries(1)
1,125 735 41 1,901 
Net charge-offs(1,570)(131)(6)(1,707)
Provision (benefit) for credit losses(1,325)(523)(446)(2,294)
Allowance build (release) for credit losses(2,895)(654)(452)(4,001)
Other changes(4)
10 0 0 10 
Balance as of September 30, 20218,306 2,061 1,206 11,573 
Reserve for unfunded lending commitments:
Balance as of December 31, 20200 0 195 195 
Provision (benefit) for losses on unfunded lending commitments0 0 (29)(29)
Balance as of September 30, 20210 0 166 166 
Combined allowance and reserve as of September 30, 2021$8,306 $2,061 $1,372 $11,739 
Three Months Ended September 30, 2020
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of June 30, 2020$12,091 $2,838 $1,903 $16,832 
Charge-offs
(1,296)(295)(88)(1,679)
Recoveries(1)
353 247 6 606 
Net charge-offs(943)(48)(82)(1,073)
Provision (benefit) for credit losses450 (43)(51)356 
Allowance build (release) for credit losses(493)(91)(133)(717)
Other changes(2)
14 0 0 14 
Balance as of September 30, 202011,612 2,747 1,770 16,129 
Reserve for unfunded lending commitments:
Balance as of June 30, 20200 0 218 218 
Provision (benefit) for losses on unfunded lending commitments0 0 (23)(23)
Balance as of September 30, 20200 0 195 195 
Combined allowance and reserve as of September 30, 2020$11,612 $2,747 $1,965 $16,324 
Nine Months Ended September 30, 2020
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of December 31, 2019$5,395 $1,038 $775 $7,208 
Cumulative effects from adoption of the CECL standard2,241 502 102 2,845 
Finance charge and fee reserve reclassification(3)
462 0 0 462 
Balance as of January 1, 20208,098 1,540 877 10,515 
Charge-offs
(4,757)(1,207)(303)(6,267)
Recoveries(1)
1,167 721 10 1,898 
Net charge-offs(3,590)(486)(293)(4,369)
Provision (benefit) for credit losses7,096 1,693 1,186 9,975 
Allowance build (release) for credit losses3,506 1,207 893 5,606 
Other changes(2)
8 0 0 8 
Balance as of September 30, 202011,612 2,747 1,770 16,129 
Reserve for unfunded lending commitments:
Balance as of December 31, 20190 5 130 135 
Cumulative effects from adoption of the CECL standard0 (5)42 37 
Balance as of January 1, 20200 0 172 172 
Provision (benefit) for losses on unfunded lending commitments0 0 23 23 
Balance as of September 30, 20200 0 195 195 
Combined allowance and reserve as of September 30, 2020$11,612 $2,747 $1,965 $16,324 
__________
(1)The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications, repossession of collateral, the periodic sale of charged off loans as well as additional strategies, such as litigation.
(2)Represents foreign currency translation adjustments.
(3)Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment.
(4)Represents foreign currency translation adjustments and an initial allowance for purchased credit-deteriorated loans of $6 million.
Schedule of Loss Sharing Arrangement Impact
The table below summarizes the changes in the estimated reimbursements from these partners for the three and nine months ended September 30, 2021 and 2020.
Table 4.2: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts
Three Months Ended September 30,
(Dollars in millions)20212020
Estimated reimbursements from partners, beginning of period$1,711 $2,433 
Amounts due from partners which reduced net charge-offs(80)(212)
Amounts estimated to be charged (from) to partners which reduced provision for credit losses(181)121 
Estimated reimbursements from partners, end of period$1,450 $2,342 
Nine Months Ended September 30,
(Dollars in millions)20212020
Estimated reimbursements from partners, beginning of period$2,159 $2,166 
Amounts due from partners which reduced net charge-offs(349)(807)
Amounts estimated to be charged (from) to partners which reduced provision for credit losses(360)983 
Estimated reimbursements from partners, end of period$1,450 $2,342