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Loans | 6 Months Ended
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Jun. 30, 2020
Receivables [Abstract] |
Loans |
NOTE 3—LOANS
Our loan portfolio consists of loans held for investment, including loans held in our consolidated trusts, and loans held for sale. We further divide our loans held for investment into three portfolio segments: credit card, consumer banking and commercial banking. Credit card loans consist of domestic and international credit card loans. Consumer banking loans consist of auto and retail banking loans. Commercial banking loans consist of commercial and multifamily real estate as well as commercial and industrial loans. The information presented in this section excludes loans held for sale, which are carried at either fair value (if we elect the fair value option) or at the lower of cost or fair value. In the first quarter of 2020, we adopted the CECL standard. Accordingly, our disclosures below reflect these adoption changes. Prior period presentation was not modified to conform to the current period presentation. See “Note 1—Summary of Significant Accounting Policies” for additional information. Amounts as of June 30, 2020, include the impacts of COVID-19 customer assistance programs where applicable. Accrued interest receivable of $1.3 billion as of June 30, 2020 is not included in the tables in this note. The table below presents the composition and aging analysis of our loans held for investment portfolio as of June 30, 2020 and December 31, 2019. The delinquency aging includes all past due loans, both performing and nonperforming. Table 3.1: Loan Portfolio Composition and Aging Analysis
|  | June 30, 2020
|  |  |  | Delinquent Loans |  |
(Dollars in millions) |  | Current |  | 30-59 Days |  | 60-89 Days |  | > 90 Days |  | Total Delinquent Loans |  | Total Loans
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 96,666 |  |  | $ | 668 |  |  | $ | 554 |  |  | $ | 1,502 |  |  | $ | 2,724 |  |  | $ | 99,390 |
International card businesses |  | 7,689 |  |  | 76 |  |  | 54 |  |  | 101 |  |  | 231 |  |  | 7,920 |
Total credit card |  | 104,355 |  |  | 744 |  |  | 608 |  |  | 1,603 |  |  | 2,955 |  |  | 107,310 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 61,043 |  |  | 1,517 |  |  | 582 |  |  | 177 |  |  | 2,276 |  |  | 63,319 |
Retail banking |  | 3,346 |  |  | 20 |  |  | 11 |  |  | 16 |  |  | 47 |  |  | 3,393 |
Total consumer banking |  | 64,389 |  |  | 1,537 |  |  | 593 |  |  | 193 |  |  | 2,323 |  |  | 66,712 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 30,667 |  |  | 137 |  |  | 118 |  |  | 31 |  |  | 286 |  |  | 30,953 |
Commercial and industrial |  | 46,311 |  |  | 114 |  |  | 23 |  |  | 89 |  |  | 226 |  |  | 46,537 |
Total commercial banking |  | 76,978 |  |  | 251 |  |  | 141 |  |  | 120 |  |  | 512 |  |  | 77,490 |
Total loans(1) |  | $ | 245,722 |  |  | $ | 2,532 |  |  | $ | 1,342 |  |  | $ | 1,916 |  |  | $ | 5,790 |  |  | $ | 251,512 |
% of Total loans |  | 97.7 | % |  | 1.0 | % |  | 0.5 | % |  | 0.8 | % |  | 2.3 | % |  | 100.0 | %
|  | December 31, 2019
|  |  |  | Delinquent Loans |  |
(Dollars in millions) |  | Current |  | 30-59 Days |  | 60-89 Days |  | > 90 Days |  | Total Delinquent Loans |  | PCI Loans |  | Total Loans
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 113,857 |  |  | $ | 1,341 |  |  | $ | 1,038 |  |  | $ | 2,277 |  |  | $ | 4,656 |  |  | $ | 93 |  |  | $ | 118,606 |
International card businesses |  | 9,277 |  |  | 133 |  |  | 84 |  |  | 136 |  |  | 353 |  |  | 0 |  |  | 9,630 |
Total credit card |  | 123,134 |  |  | 1,474 |  |  | 1,122 |  |  | 2,413 |  |  | 5,009 |  |  | 93 |  |  | 128,236 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 55,778 |  |  | 2,828 |  |  | 1,361 |  |  | 395 |  |  | 4,584 |  |  | 0 |  |  | 60,362 |
Retail banking |  | 2,658 |  |  | 24 |  |  | 8 |  |  | 11 |  |  | 43 |  |  | 2 |  |  | 2,703 |
Total consumer banking |  | 58,436 |  |  | 2,852 |  |  | 1,369 |  |  | 406 |  |  | 4,627 |  |  | 2 |  |  | 63,065 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 30,157 |  |  | 43 |  |  | 20 |  |  | 4 |  |  | 67 |  |  | 21 |  |  | 30,245 |
Commercial and industrial |  | 44,009 |  |  | 75 |  |  | 26 |  |  | 143 |  |  | 244 |  |  | 10 |  |  | 44,263 |
Total commercial banking |  | 74,166 |  |  | 118 |  |  | 46 |  |  | 147 |  |  | 311 |  |  | 31 |  |  | 74,508 |
Total loans(1) |  | $ | 255,736 |  |  | $ | 4,444 |  |  | $ | 2,537 |  |  | $ | 2,966 |  |  | $ | 9,947 |  |  | $ | 126 |  |  | $ | 265,809 |
% of Total loans |  | 96.2 | % |  | 1.6 | % |  | 1.0 | % |  | 1.1 | % |  | 3.7 | % |  | 0.1 | % |  | 100.0 | %
__________ (1) Loans include unamortized premiums and discounts, and unamortized deferred fees and costs totaling $1.1 billion as of both June 30, 2020 and December 31, 2019. The following table presents our loans held for investment that are 90 days or more past due that continue to accrue interest and loans that are classified as nonperforming as of June 30, 2020 and December 31, 2019. We also present nonperforming loans without an allowance as of June 30, 2020. Nonperforming loans generally include loans that have been placed on nonaccrual status. Table 3.2: 90+ Day Delinquent Loans Accruing Interest and Nonperforming Loans
|  | June 30, 2020 |  | December 31, 2019
(Dollars in millions) |  | > 90 Days and Accruing |  | Nonperforming Loans(1) |  | Nonperforming Loans Without an Allowance |  | > 90 Days and Accruing |  | Nonperforming Loans
Credit Card: |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 1,502 |  |  | N/A |  |  | $ | 0 |  |  | $ | 2,277 |  |  | N/A |
International card businesses |  | 94 |  |  | $ | 23 |  |  | 0 |  |  | 130 |  |  | $ | 25 |
Total credit card |  | 1,596 |  |  | 23 |  |  | 0 |  |  | 2,407 |  |  | 25 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |
Auto |  | 0 |  |  | 260 |  |  | 0 |  |  | 0 |  |  | 487 |
Retail banking |  | 0 |  |  | 24 |  |  | 2 |  |  | 0 |  |  | 23 |
Total consumer banking |  | 0 |  |  | 284 |  |  | 2 |  |  | 0 |  |  | 510 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 14 |  |  | 167 |  |  | 162 |  |  | 0 |  |  | 38 |
Commercial and industrial |  | 0 |  |  | 493 |  |  | 160 |  |  | 0 |  |  | 410 |
Total commercial banking |  | 14 |  |  | 660 |  |  | 322 |  |  | 0 |  |  | 448 |
Total |  | $ | 1,610 |  |  | $ | 967 |  |  | $ | 324 |  |  | $ | 2,407 |  |  | $ | 983 |
% of Total loans held for investment |  | 0.6 | % |  | 0.4 | % |  | 0.1 | % |  | 0.9 | % |  | 0.4 | %
__________ (1) We recognized interest income for loans classified as nonperforming of $5 million and $11 million for the three and six months ended June 30, 2020, respectively. Credit Quality Indicators We closely monitor economic conditions and loan performance trends to assess and manage our exposure to credit risk. We discuss these risks and our credit quality indicator for each portfolio segment below. Credit Card Our credit card loan portfolio is highly diversified across millions of accounts and numerous geographies without significant individual exposure. We therefore generally manage credit risk based on portfolios with common risk characteristics. The risk in our credit card loan portfolio correlates to broad economic trends, such as unemployment rates and home values, as well as consumers’ financial condition, all of which can have a material effect on credit performance. The key indicator we assess in monitoring the credit quality and risk of our credit card loan portfolio is delinquency trends, including an analysis of loan migration between delinquency categories over time. The table below presents our credit card portfolio by delinquency status as of June 30, 2020. Table 3.3: Credit Card Delinquency Status
|  | June 30, 2020
(Dollars in millions) |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Credit Card: |  |  |  |  |  |
Domestic credit card: |  |  |  |  |  |
Current |  | $ | 96,000 |  |  | $ | 666 |  |  | $ | 96,666 |
30-59 days |  | 637 |  |  | 31 |  |  | 668 |
60-89 days |  | 532 |  |  | 22 |  |  | 554 |
Greater than 90 days |  | 1,475 |  |  | 27 |  |  | 1,502 |
Total domestic credit card |  | 98,644 |  |  | 746 |  |  | 99,390 |
International card businesses: |  |  |  |  |  |
Current |  | 7,625 |  |  | 64 |  |  | 7,689 |
30-59 days |  | 66 |  |  | 10 |  |  | 76 |
60-89 days |  | 43 |  |  | 11 |  |  | 54 |
Greater than 90 days |  | 87 |  |  | 14 |  |  | 101 |
Total international card businesses |  | 7,821 |  |  | 99 |  |  | 7,920 |
Total credit card |  | $ | 106,465 |  |  | $ | 845 |  |  | $ | 107,310 |
Consumer Banking Our consumer banking loan portfolio consists of auto and retail banking loans. Similar to our credit card loan portfolio, the risk in our consumer banking loan portfolio correlates to broad economic trends, such as unemployment rates, gross domestic product and home values, as well as consumers’ financial condition, all of which can have a material effect on credit performance. The key indicator we monitor when assessing the credit quality and risk of our auto loan portfolio is borrower credit scores as they measure the creditworthiness of borrowers. Delinquency trends are the key indicator we assess in monitoring the credit quality and risk of our retail banking loan portfolio. The table below presents our consumer banking portfolio of loans held for investment by credit quality indicator as of June 30, 2020 and December 31, 2019. We present our auto loan portfolio by FICO scores at origination and our retail banking loan portfolio by delinquency status, which includes all past due loans, both performing and nonperforming. Table 3.4: Consumer Banking Portfolio by Credit Quality Indicator
|  | June 30, 2020 |  |
|  | Term Loans by Vintage Year |  |  |  |  |  |  |  |
(Dollars in millions) |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Total Term Loans |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total |  | December 31, 2019
Auto—At origination FICO scores:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Greater than 660 |  | $ | 6,968 |  |  | $ | 10,018 |  |  | $ | 6,099 |  |  | $ | 3,931 |  |  | $ | 1,879 |  |  | $ | 519 |  |  | $ | 29,414 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 29,414 |  |  | $ | 28,773 |
621-660 |  | 3,028 |  |  | 4,436 |  |  | 2,549 |  |  | 1,569 |  |  | 721 |  |  | 233 |  |  | 12,536 |  |  | 0 |  |  | 0 |  |  | 12,536 |  |  | 11,924 |
620 or below |  | 5,310 |  |  | 7,550 |  |  | 4,149 |  |  | 2,612 |  |  | 1,272 |  |  | 476 |  |  | 21,369 |  |  | 0 |  |  | 0 |  |  | 21,369 |  |  | 19,665 |
Total auto |  | 15,306 |  |  | 22,004 |  |  | 12,797 |  |  | 8,112 |  |  | 3,872 |  |  | 1,228 |  |  | 63,319 |  |  | 0 |  |  | 0 |  |  | 63,319 |  |  | 60,362 |
Retail banking—Delinquency status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 1,032 |  |  | 237 |  |  | 236 |  |  | 243 |  |  | 202 |  |  | 619 |  |  | 2,569 |  |  | 768 |  |  | 9 |  |  | 3,346 |  |  | 2,658 |
30-59 days |  | 0 |  |  | 0 |  |  | 0 |  |  | 1 |  |  | 0 |  |  | 4 |  |  | 5 |  |  | 15 |  |  | 0 |  |  | 20 |  |  | 24 |
60-89 days |  | 0 |  |  | 0 |  |  | 5 |  |  | 1 |  |  | 0 |  |  | 1 |  |  | 7 |  |  | 4 |  |  | 0 |  |  | 11 |  |  | 8 |
Greater than 90 days |  | 0 |  |  | 0 |  |  | 0 |  |  | 3 |  |  | 2 |  |  | 3 |  |  | 8 |  |  | 8 |  |  | 0 |  |  | 16 |  |  | 11 |
Total retail banking(2) |  | 1,032 |  |  | 237 |  |  | 241 |  |  | 248 |  |  | 204 |  |  | 627 |  |  | 2,589 |  |  | 795 |  |  | 9 |  |  | 3,393 |  |  | 2,701 |
Total consumer banking |  | $ | 16,338 |  |  | $ | 22,241 |  |  | $ | 13,038 |  |  | $ | 8,360 |  |  | $ | 4,076 |  |  | $ | 1,855 |  |  | $ | 65,908 |  |  | $ | 795 |  |  | $ | 9 |  |  | $ | 66,712 |  |  | $ | 63,063 |
__________
(1) | Amounts represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category.
(2) Includes the Paycheck Protection Program (“PPP”) loans of $931 million as of June 30, 2020. Commercial Banking The key credit quality indicator for our commercial loan portfolios is our internal risk ratings. We assign internal risk ratings to loans based on relevant information about the ability of the borrowers to repay their debt. In determining the risk rating of a particular loan, some of the factors considered are the borrower’s current financial condition, historical and projected future credit performance, prospects for support from financially responsible guarantors, the estimated realizable value of any collateral and current economic trends. The scale based on our internal risk rating system is as follows:
• | Noncriticized: Loans that have not been designated as criticized, frequently referred to as “pass” loans.
• | Criticized performing: Loans in which the financial condition of the obligor is stressed, affecting earnings, cash flows or collateral values. The borrower currently has adequate capacity to meet near-term obligations; however, the stress, left unabated, may result in deterioration of the repayment prospects at some future date.
• | Criticized nonperforming: Loans that are not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Loans classified as criticized nonperforming have a well-defined weakness, or weaknesses, which jeopardize the full repayment of the debt. These loans are characterized by the distinct possibility that we will sustain a credit loss if the deficiencies are not corrected and are generally placed on nonaccrual status.
We use our internal risk rating system for regulatory reporting, determining the frequency of credit exposure reviews, and evaluating and determining the allowance for credit losses for commercial loans. Generally, loans that are designated as criticized performing and criticized nonperforming are reviewed quarterly by management to determine if they are appropriately classified/rated and whether any impairment exists. Noncriticized loans are also generally reviewed, at least annually, to determine the appropriate risk rating. In addition, we evaluate the risk rating during the renewal process of any loan or if a loan becomes past due. The following table presents our commercial banking portfolio of loans held for investment by internal risk ratings as of June 30, 2020 and December 31, 2019. The internal risk rating status includes all past due loans, both performing and nonperforming. Table 3.5: Commercial Banking Portfolio by Internal Risk Ratings
|  | June 30, 2020
|  | Term Loans by Vintage Year |  |  |  |  |  |
(Dollars in millions) |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Total Term Loans |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Internal risk rating:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncriticized |  | $ | 2,466 |  |  | $ | 5,490 |  |  | $ | 3,587 |  |  | $ | 2,000 |  |  | $ | 2,217 |  |  | $ | 6,635 |  |  | $ | 22,395 |  |  | $ | 6,878 |  |  | $ | 0 |  |  | $ | 29,273 |
Criticized performing |  | 69 |  |  | 163 |  |  | 343 |  |  | 211 |  |  | 216 |  |  | 456 |  |  | 1,458 |  |  | 55 |  |  | 0 |  |  | 1,513 |
Criticized nonperforming |  | 0 |  |  | 11 |  |  | 30 |  |  | 0 |  |  | 4 |  |  | 122 |  |  | 167 |  |  | 0 |  |  | 0 |  |  | 167 |
Total commercial and multifamily real estate |  | 2,535 |  |  | 5,664 |  |  | 3,960 |  |  | 2,211 |  |  | 2,437 |  |  | 7,213 |  |  | 24,020 |  |  | 6,933 |  |  | 0 |  |  | 30,953 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncriticized |  | 4,879 |  |  | 10,234 |  |  | 4,758 |  |  | 3,078 |  |  | 1,998 |  |  | 3,814 |  |  | 28,761 |  |  | 12,774 |  |  | 73 |  |  | 41,608 |
Criticized performing |  | 169 |  |  | 668 |  |  | 524 |  |  | 371 |  |  | 114 |  |  | 202 |  |  | 2,048 |  |  | 2,388 |  |  | 0 |  |  | 4,436 |
Criticized nonperforming |  | 32 |  |  | 76 |  |  | 60 |  |  | 60 |  |  | 8 |  |  | 0 |  |  | 236 |  |  | 257 |  |  | 0 |  |  | 493 |
Total commercial and industrial |  | 5,080 |  |  | 10,978 |  |  | 5,342 |  |  | 3,509 |  |  | 2,120 |  |  | 4,016 |  |  | 31,045 |  |  | 15,419 |  |  | 73 |  |  | 46,537 |
Total commercial banking(2) |  | $ | 7,615 |  |  | $ | 16,642 |  |  | $ | 9,302 |  |  | $ | 5,720 |  |  | $ | 4,557 |  |  | $ | 11,229 |  |  | $ | 55,065 |  |  | $ | 22,352 |  |  | $ | 73 |  |  | $ | 77,490 |
|  | December 31, 2019
(Dollars in millions) |  | Commercial and Multifamily Real Estate |  | % of Total |  | Commercial and Industrial |  | % of Total |  | Total Commercial Banking |  | % of Total
Internal risk rating:(1) |  |  |  |  |  |  |  |  |  |  |  |
Noncriticized |  | $ | 29,625 |  |  | 97.9 | % |  | $ | 42,223 |  |  | 95.4 | % |  | $ | 71,848 |  |  | 96.5 | %
Criticized performing |  | 561 |  |  | 1.9 |  |  | 1,620 |  |  | 3.7 |  |  | 2,181 |  |  | 2.9 |
Criticized nonperforming |  | 38 |  |  | 0.1 |  |  | 410 |  |  | 0.9 |  |  | 448 |  |  | 0.6 |
PCI loans |  | 21 |  |  | 0.1 |  |  | 10 |  |  | 0.0 |  |  | 31 |  |  | 0.0 |
Total |  | $ | 30,245 |  |  | 100.0 | % |  | $ | 44,263 |  |  | 100.0 | % |  | $ | 74,508 |  |  | 100.0 | %
__________
(1) | Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.
(2) Includes PPP loans of $231 million as of June 30, 2020. Revolving Loans Converted to Term Loans For the three and six months ended June 30, 2020, we converted $89 million and $249 million of revolving loans to term loans, respectively, primarily in our domestic credit card loan portfolio. Troubled Debt Restructurings In response to the COVID-19 pandemic, the Federal Banking Agencies issued an interagency statement that provides banking organizations with additional guidance and relief on accounting for certain customer concessions related to COVID-19. Specifically, TDR accounting relief is available for short-term COVID-19-related modifications of loans that were not more than 30 days past due where concessions do not extend beyond six months. We assessed all loan modifications introduced to borrowers as of June 30, 2020 in response to COVID-19 and followed guidance that such eligible loan modifications made on a temporary and good faith basis in response to COVID-19 are not considered TDRs. Total recorded TDRs were $1.8 billion and $1.7 billion as of June 30, 2020 and December 31, 2019, respectively. TDRs classified as performing in our credit card and consumer banking loan portfolios totaled $1.2 billion and $1.1 billion as of June 30, 2020 and December 31, 2019, respectively. TDRs classified as performing in our commercial banking loan portfolio totaled $349 million and $224 million as of June 30, 2020 and December 31, 2019, respectively. Commitments to lend additional funds on loans modified in TDRs totaled $145 million and $178 million as of June 30, 2020 and December 31, 2019, respectively. Loans Modified in TDRs As part of our loan modification programs to borrowers experiencing financial difficulty, we may provide multiple concessions to minimize our economic loss and improve long-term loan performance and collectability. The following tables present the major modification types, recorded investment amounts and financial effects of loans modified in TDRs during the three and six months ended June 30, 2020 and 2019. Table 3.6: Troubled Debt Restructurings
|  | Total Loans Modified(1) |  | Three Months Ended June 30, 2020
|  | Reduced Interest Rate |  | Term Extension |  | Balance Reduction
(Dollars in millions) |  | % of TDR Activity(2) |  | Average Rate Reduction |  | % of TDR Activity(2) |  | Average Term Extension (Months) |  | % of TDR Activity(2) |  | Gross Balance Reduction
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 56 |  |  | 100 | % |  | 15.41 | % |  | 0 | % |  | 0 |  | 0 | % |  | $ | 0 |
International card businesses |  | 28 |  |  | 100 |  |  | 26.56 |  |  | 0 |  |  | 0 |  | 0 |  |  | 0 |
Total credit card |  | 84 |  |  | 100 |  |  | 19.14 |  |  | 0 |  |  | 0 |  | 0 |  |  | 0 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 137 |  |  | 5 |  |  | 4.12 |  |  | 95 |  |  | 3 |  | 0 |  |  | 0 |
Retail banking |  | 1 |  |  | 10 |  |  | 8.37 |  |  | 59 |  |  | 4 |  | 0 |  |  | 0 |
Total consumer banking |  | 138 |  |  | 5 |  |  | 4.19 |  |  | 95 |  |  | 3 |  | 0 |  |  | 0 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 9 |  |  | 0 |  |  | 0.00 |  |  | 100 |  |  | 7 |  | 0 |  |  | 0 |
Commercial and industrial |  | 181 |  |  | 0 |  |  | 0.00 |  |  | 52 |  |  | 8 |  | 9 |  |  | 7 |
Total commercial banking |  | 190 |  |  | 0 |  |  | 0.00 |  |  | 55 |  |  | 8 |  | 8 |  |  | 7 |
Total |  | $ | 412 |  |  | 22 |  |  | 17.96 |  |  | 57 |  |  | 5 |  | 4 |  |  | $ | 7 |
|  | Total Loans Modified(1) |  | Six Months Ended June 30, 2020
|  | Reduced Interest Rate |  | Term Extension |  | Balance Reduction
(Dollars in millions) |  | % of TDR Activity(2) |  | Average Rate Reduction |  | % of TDR Activity(2) |  | Average Term Extension (Months) |  | % of TDR Activity(2) |  | Gross Balance Reduction
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 145 |  |  | 100 | % |  | 16.05 | % |  | 0 | % |  | 0 |  | 0 | % |  | $ | 0 |
International card businesses |  | 79 |  |  | 100 |  |  | 27.05 |  |  | 0 |  |  | 0 |  | 0 |  |  | 0 |
Total credit card |  | 224 |  |  | 100 |  |  | 19.94 |  |  | 0 |  |  | 0 |  | 0 |  |  | 0 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 260 |  |  | 12 |  |  | 3.51 |  |  | 95 |  |  | 4 |  | 0 |  |  | 0 |
Retail banking |  | 4 |  |  | 4 |  |  | 11.42 |  |  | 15 |  |  | 4 |  | 0 |  |  | 0 |
Total consumer banking |  | 264 |  |  | 12 |  |  | 3.55 |  |  | 93 |  |  | 4 |  | 0 |  |  | 0 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 28 |  |  | 0 |  |  | 0.00 |  |  | 100 |  |  | 10 |  | 0 |  |  | 0 |
Commercial and industrial |  | 188 |  |  | 0 |  |  | 0.00 |  |  | 50 |  |  | 8 |  | 8 |  |  | 7 |
Total commercial banking |  | 216 |  |  | 0 |  |  | 0.00 |  |  | 57 |  |  | 9 |  | 7 |  |  | 7 |
Total |  | $ | 704 |  |  | 36 |  |  | 17.90 |  |  | 52 |  |  | 5 |  | 2 |  |  | $ | 7 |
|  | Total Loans Modified(1) |  | Three Months Ended June 30, 2019
| Reduced Interest Rate |  | Term Extension
(Dollars in millions) | % of TDR Activity(2) |  | Average Rate Reduction |  | % of TDR Activity(2) |  | Average Term Extension (Months)
Credit Card: |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 74 |  |  | 100 | % |  | 16.60 | % |  | 0 | % |  | 0
International card businesses |  | 40 |  |  | 100 |  |  | 27.25 |  |  | 0 |  |  | 0
Total credit card |  | 114 |  |  | 100 |  |  | 20.32 |  |  | 0 |  |  | 0
Consumer Banking: |  |  |  |  |  |  |  |  |  |
Auto |  | 52 |  |  | 46 |  |  | 3.78 |  |  | 89 |  |  | 8
Retail banking |  | 5 |  |  | 9 |  |  | 10.55 |  |  | 57 |  |  | 3
Total consumer banking |  | 57 |  |  | 42 |  |  | 3.93 |  |  | 86 |  |  | 8
Commercial Banking: |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 14 |  |  | 0 |  |  | 0.00 |  |  | 100 |  |  | 3
Total commercial lending |  | 14 |  |  | 0 |  |  | 0.00 |  |  | 100 |  |  | 3
Small-ticket commercial real estate |  | 1 |  |  | 0 |  |  | 0.00 |  |  | 0 |  |  | 0
Total commercial banking |  | 15 |  |  | 0 |  |  | 0.00 |  |  | 98 |  |  | 3
Total |  | $ | 186 |  |  | 75 |  |  | 17.45 |  |  | 34 |  |  | 7
|  | Total Loans Modified(1) |  | Six Months Ended June 30, 2019
| Reduced Interest Rate |  | Term Extension
(Dollars in millions) | % of TDR Activity(2) |  | Average Rate Reduction |  | % of TDR Activity(2) |  | Average Term Extension (Months)
Credit Card: |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 172 |  |  | 100 | % |  | 16.50 | % |  | 0 | % |  | 0
International card businesses |  | 87 |  |  | 100 |  |  | 27.44 |  |  | 0 |  |  | 0
Total credit card |  | 259 |  |  | 100 |  |  | 20.17 |  |  | 0 |  |  | 0
Consumer Banking: |  |  |  |  |  |  |  |  |  |
Auto |  | 124 |  |  | 41 |  |  | 3.81 |  |  | 90 |  |  | 7
Retail banking |  | 6 |  |  | 10 |  |  | 10.91 |  |  | 61 |  |  | 3
Total consumer banking |  | 130 |  |  | 39 |  |  | 3.90 |  |  | 89 |  |  | 7
Commercial Banking: |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 34 |  |  | 100 |  |  | 0.00 |  |  | 0 |  |  | 0
Commercial and industrial |  | 35 |  |  | 0 |  |  | 0.00 |  |  | 40 |  |  | 1
Total commercial lending |  | 69 |  |  | 49 |  |  | 0.00 |  |  | 20 |  |  | 1
Small-ticket commercial real estate |  | 1 |  |  | 0 |  |  | 0.00 |  |  | 0 |  |  | 0
Total commercial banking |  | 70 |  |  | 49 |  |  | 0.00 |  |  | 20 |  |  | 0
Total |  | $ | 459 |  |  | 75 |  |  | 15.78 |  |  | 28 |  |  | 6
__________
(1) | Represents the recorded investment of total loans modified in TDRs at the end of the quarter in which they were modified. As not every modification type is included in the table above, the total percentage of TDR activity may not add up to 100%. Some loans may receive more than one type of concession as part of the modification.
(2) | Due to multiple concessions granted to some troubled borrowers, percentages may total more than 100% for certain loan types.
Subsequent Defaults of Completed TDR Modifications The following table presents the type, number and recorded investment of loans modified in TDRs that experienced a default during the period and had completed a modification event in the twelve months prior to the default. A default occurs if the loan is either 90 days or more delinquent, has been charged off as of the end of the period presented or has been reclassified from accrual to nonaccrual status. Table 3.7: TDRs—Subsequent Defaults
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2020 |  | 2019 |  | 2020 |  | 2019
(Dollars in millions) |  | Number of Contracts |  | Amount |  | Number of Contracts |  | Amount |  | Number of Contracts |  | Amount |  | Number of Contracts |  | Amount
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | 9,582 |  |  | $ | 21 |  |  | 11,581 |  |  | $ | 26 |  |  | 20,468 |  |  | $ | 43 |  |  | 25,608 |  |  | $ | 55 |
International card businesses |  | 17,508 |  |  | 25 |  |  | 18,185 |  |  | 28 |  |  | 35,365 |  |  | 51 |  |  | 34,891 |  |  | 56 |
Total credit card |  | 27,090 |  |  | 46 |  |  | 29,766 |  |  | 54 |  |  | 55,833 |  |  | 94 |  |  | 60,499 |  |  | 111 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 860 |  |  | 11 |  |  | 1,312 |  |  | 16 |  |  | 2,135 |  |  | 27 |  |  | 2,417 |  |  | 29 |
Retail banking |  | 3 |  |  | 0 |  |  | 4 |  |  | 1 |  |  | 4 |  |  | 0 |  |  | 12 |  |  | 1 |
Total consumer banking |  | 863 |  |  | 11 |  |  | 1,316 |  |  | 17 |  |  | 2,139 |  |  | 27 |  |  | 2,429 |  |  | 30 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 1 |  |  | 21 |  |  | 0 |  |  | 0 |  |  | 7 |  |  | 49 |  |  | 0 |  |  | 0 |
Total commercial banking |  | 1 |  |  | 21 |  |  | 0 |  |  | 0 |  |  | 7 |  |  | 49 |  |  | 0 |  |  | 0 |
Total |  | 27,954 |  |  | $ | 78 |  |  | 31,082 |  |  | $ | 71 |  |  | 57,979 |  |  | $ | 170 |  |  | 62,928 |  |  | $ | 141 |
Loans Pledged We pledged loan collateral of $15.7 billion and $14.6 billion to secure the majority of our FHLB borrowing capacity of $17.9 billion and $18.7 billion as of June 30, 2020 and December 31, 2019, respectively. We also pledged loan collateral of $28.2 billion and $6.7 billion to secure our Federal Reserve Discount Window borrowing capacity of $22.2 billion and $5.3 billion as of June 30, 2020 and December 31, 2019, respectively. In addition to loans pledged, we securitized a portion of our credit card and auto loans. See “Note 5—Variable Interest Entities and Securitizations” for additional information.

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- Definition The entire disclosure for claims held for amounts due a company, excluding disclosure for allowance for credit losses. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Also excludes disclosure for financing receivables. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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