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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments (Tables)
 12 Months Ended
Dec. 31, 2022
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 years ended December 31, 2022, 2021 and 2020. Our allowance for credit losses increased by $1.8 billion to $13.2 billion as of December 31, 2022 from 2021.
Table 4.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
(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(1)
462 0 0 462 
Balance as of January 1, 20208,098 1,540 877 10,515 
Charge-offs
(5,749)(1,534)(394)(7,677)
Recoveries(2)
1,479 956 17 2,452 
Net charge-offs(4,270)(578)(377)(5,225)
Provision for credit losses7,327 1,753 1,158 10,238 
Allowance build for credit losses(3)
3,057 1,175 781 5,013 
Other changes(4)
36 0 0 36 
Balance as of December 31, 2020$11,191 $2,715 $1,658 $15,564 
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
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 for losses on unfunded lending commitments0 0 23 23 
Balance as of December 31, 20200 0 195 195 
Combined allowance and reserve as of December 31, 2020$11,191 $2,715 $1,853 $15,759 
Allowance for credit losses:
Balance as of December 31, 2020$11,191 $2,715 $1,658 $15,564 
Charge-offs
(3,481)(1,211)(48)(4,740)
Recoveries(2)
1,525 935 46 2,506 
Net charge-offs(1,956)(276)(2)(2,234)
Benefit for credit losses(902)(521)(489)(1,912)
Allowance release for credit losses(2,858)(797)(491)(4,146)
Other changes(4)
12 0 0 12 
Balance as of December 31, 20218,345 1,918 1,167 11,430 
Reserve for unfunded lending commitments:
Balance as of December 31, 20200 0 195 195 
Provision (benefit) for losses on unfunded lending commitments0 0 (30)(30)
Balance as of December 31, 20210 0 165 165 
Combined allowance and reserve as of December 31, 2021$8,345 $1,918 $1,332 $11,595 
Allowance for credit losses:
Balance as of December 31, 2021$8,345 $1,918 $1,167 $11,430 
Charge-offs
(4,362)(1,614)(88)(6,064)
Recoveries(2)
1,314 760 17 2,091 
Net charge-offs(3,048)(854)(71)(3,973)
Provision (benefit) for credit losses4,265 1,173 362 5,800 
Allowance build for credit losses1,217 319 291 1,827 
Other changes(4)
(17)0 0 (17)
Balance as of December 31, 20229,545 2,237 1,458 13,240 
Reserve for unfunded lending commitments:
Balance as of December 31, 20210 0 165 165 
Provision for losses on unfunded lending commitments0 0 53 53 
Balance as of December 31, 20220 0 218 218 
Combined allowance and reserve as of December 31, 2022$9,545 $2,237 $1,676 $13,458 
__________
(1)Concurrent with our adoption of the current expected credit losses (“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.
(2)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.
(3)Includes an allowance release of $327 million for a partnership credit card loan portfolio transferred to held for sale in the third quarter of 2020.
(4)Primarily represents foreign currency translation adjustments and, in periods of acquisition, initial allowance builds for purchase credit-deteriorated loans.
Schedule of Loss Sharing Arrangement Impact
The table below summarizes the changes in the estimated reimbursements from these partners for the years ended December 31, 2022, 2021 and 2020.
Table 4.2: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts
Year Ended December 31,
(Dollars in millions)202220212020
Estimated reimbursements from partners, beginning of period(1)
$1,450 $2,159 $2,166 
Amounts due from partners which reduced net charge-offs(515)(438)(959)
Amounts expected to become due from (to) partners which reduced (increased) provision for credit losses623 (271)952 
Estimated reimbursements from partners, end of period$1,558 $1,450 $2,159 
__________
(1)Includes effects from adoption of the CECL standard in the first quarter of 2020.