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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments (Tables) | 9 Months Ended
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Sep. 30, 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 three and nine months ended September 30, 2022 and 2021. Our allowance for credit losses increased by $779 million to $12.2 billion as of September 30, 2022 from December 31, 2021. Table 4.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
|  | Three Months Ended September 30, 2022
(Dollars in millions) |  | Credit Card |  | Consumer Banking |  | Commercial Banking |  |  |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2022 |  | $ | 8,166 |  |  | $ | 2,047 |  |  | $ | 1,278 |  |  |  |  | $ | 11,491 |
Charge-offs |  | (1,047) |  |  | (410) |  |  | (13) |  |  |  |  | (1,470) |
Recoveries(1) |  | 352 |  |  | 186 |  |  | 1 |  |  |  |  | 539 |
Net charge-offs |  | (695) |  |  | (224) |  |  | (12) |  |  |  |  | (931) |
Provision (benefit) for credit losses |  | 1,261 |  |  | 285 |  |  | 119 |  |  |  |  | 1,665 |
Allowance build (release) for credit losses |  | 566 |  |  | 61 |  |  | 107 |  |  |  |  | 734 |
Other changes(2) |  | (16) |  |  | 0 |  |  | 0 |  |  |  |  | (16) |
Balance as of September 30, 2022 |  | 8,716 |  |  | 2,108 |  |  | 1,385 |  |  |  |  | 12,209 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2022 |  | 0 |  |  | 0 |  |  | 239 |  |  |  |  | 239 |
Provision for losses on unfunded lending commitments |  | 0 |  |  | 0 |  |  | 4 |  |  |  |  | 4 |
Balance as of September 30, 2022 |  | 0 |  |  | 0 |  |  | 243 |  |  |  |  | 243 |
Combined allowance and reserve as of September 30, 2022 |  | $ | 8,716 |  |  | $ | 2,108 |  |  | $ | 1,628 |  |  |  |  | $ | 12,452 |
|  | Nine Months Ended September 30, 2022
(Dollars in millions) |  | Credit Card |  | Consumer Banking |  | Commercial Banking |  |  |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Balance as of December 31, 2021 |  | $ | 8,345 |  |  | $ | 1,918 |  |  | $ | 1,167 |  |  |  |  | $ | 11,430 |
Charge-offs |  | (3,011) |  |  | (1,090) |  |  | (73) |  |  |  |  | (4,174) |
Recoveries(1) |  | 1,031 |  |  | 584 |  |  | 16 |  |  |  |  | 1,631 |
Net charge-offs |  | (1,980) |  |  | (506) |  |  | (57) |  |  |  |  | (2,543) |
Provision (benefit) for credit losses |  | 2,387 |  |  | 696 |  |  | 275 |  |  |  |  | 3,358 |
Allowance build (release) for credit losses |  | 407 |  |  | 190 |  |  | 218 |  |  |  |  | 815 |
Other changes(2) |  | (36) |  |  | 0 |  |  | 0 |  |  |  |  | (36) |
Balance as of September 30, 2022 |  | 8,716 |  |  | 2,108 |  |  | 1,385 |  |  |  |  | 12,209 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |
Balance as of December 31, 2021 |  | 0 |  |  | 0 |  |  | 165 |  |  |  |  | 165 |
Provision for losses on unfunded lending commitments |  | 0 |  |  | 0 |  |  | 78 |  |  |  |  | 78 |
Balance as of September 30, 2022 |  | 0 |  |  | 0 |  |  | 243 |  |  |  |  | 243 |
Combined allowance and reserve as of September 30, 2022 |  | $ | 8,716 |  |  | $ | 2,108 |  |  | $ | 1,628 |  |  |  |  | $ | 12,452 |
|  | Three Months Ended September 30, 2021
(Dollars in millions) |  | Credit Card |  | Consumer Banking |  | Commercial Banking |  |  |  | Total
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(2) |  | (3) |  |  | 0 |  |  | 0 |  |  |  |  | (3) |
Balance as of September 30, 2021 |  | 8,306 |  |  | 2,061 |  |  | 1,206 |  |  |  |  | 11,573 |
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2021 |  | 0 |  |  | 0 |  |  | 164 |  |  |  |  | 164 |
Provision (benefit) for losses on unfunded lending commitments |  | 0 |  |  | 0 |  |  | 2 |  |  |  |  | 2 |
Balance as of September 30, 2021 |  | 0 |  |  | 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 Card |  | Consumer Banking |  | Commercial Banking |  |  |  | Total
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(2) |  | 10 |  |  | 0 |  |  | 0 |  |  |  |  | 10 |
Balance as of September 30, 2021 |  | 8,306 |  |  | 2,061 |  |  | 1,206 |  |  |  |  | 11,573 |
|  | Nine Months Ended September 30, 2021
(Dollars in millions) |  | Credit Card |  | Consumer Banking |  | Commercial Banking |  |  |  | Total
Reserve for unfunded lending commitments: |  |  |  |  |  |  |  |  |  |
Balance as of December 31, 2020 |  | 0 |  |  | 0 |  |  | 195 |  |  |  |  | 195 |
Provision (benefit) for losses on unfunded lending commitments |  | 0 |  |  | 0 |  |  | (29) |  |  |  |  | (29) |
Balance as of September 30, 2021 |  | 0 |  |  | 0 |  |  | 166 |  |  |  |  | 166 |
Combined allowance and reserve as of September 30, 2021 |  | $ | 8,306 |  |  | $ | 2,061 |  |  | $ | 1,372 |  |  |  |  | $ | 11,739 |
__________ (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)Primarily represents foreign currency translation adjustments and initial allowance for purchase credit-deteriorated loans. The initial allowance of purchase credit-deteriorated loans was $10 million for the three and nine months ended September 30, 2022 and $6 million for the three and nine months ended September 30, 2021.
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, 2022 and 2021. Table 4.2: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts
|  | Three Months Ended September 30, |  |
(Dollars in millions) |  | 2022 |  | 2021 |  |
Estimated reimbursements from partners, beginning of period |  | $ | 1,302 |  |  | $ | 1,711 |  |  |
Amounts due from partners which reduced net charge-offs |  | (127) |  |  | (80) |  |  |
Amounts expected to become due from (to) partners which reduced (increased) provision for credit losses |  | 237 |  |  | (181) |  |  |
Estimated reimbursements from partners, end of period |  | $ | 1,412 |  |  | $ | 1,450 |  |  |
|  | Nine Months Ended September 30, |  |
(Dollars in millions) |  | 2022 |  | 2021 |  |
Estimated reimbursements from partners, beginning of period |  | $ | 1,450 |  |  | $ | 2,159 |  |  |
Amounts due from partners which reduced net charge-offs |  | (353) |  |  | (349) |  |  |
Amounts expected to become due from (to) partners which reduced (increased) provision for credit losses |  | 315 |  |  | (360) |  |  |
Estimated reimbursements from partners, end of period |  | $ | 1,412 |  |  | $ | 1,450 |  |  |

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