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Loans
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Loans
Note 4. Loans
As of September 30, 2023, our loan portfolio consisted of loans held for sale, including personal loans, student loans and home loans, which are measured at fair value under the fair value option, and loans held for investment, including credit cards, and commercial and consumer banking loans, which are measured at amortized cost. Below is a disaggregated presentation of our loans, inclusive of fair market value adjustments and accrued interest income and net of the allowance for credit losses, as applicable:
September 30,
2023		December 31,
2022
Loans held for sale
Personal loans(1)
$14,850,996 $8,610,434 
Student loans(2)
6,041,544 4,877,177 
Home loans
101,296 69,463 
Total loans held for sale, at fair value20,993,836 13,557,074 
Loans held for investment(3)
Credit card(4)
247,241 209,164 
Commercial and consumer banking:
Commercial real estate104,743 88,652 
Commercial and industrial5,917 7,179 
Residential real estate and other consumer3,347 2,962 
Total commercial and consumer banking114,007 98,793 
Total loans held for investment, at amortized cost361,248 307,957 
Total loans
$21,355,084 $13,865,031 
_____________________
(1) Includes $618,829 and $663,004 of personal loans in consolidated VIEs as of September 30, 2023 and December 31, 2022, respectively.
(2) Includes $275,244 and $268,697 of student loans in consolidated VIEs as of September 30, 2023 and December 31, 2022, respectively.
(3) See Note 5. Allowance for Credit Losses for additional information on our loans at amortized cost as it pertains to the allowance for credit losses.
(4) For credit cards, loan origination costs are expensed as incurred primarily within noninterest expense—sales and marketing in the condensed consolidated statements of operations and comprehensive loss.

Loans Held for Sale
The following table summarizes the aggregate fair value of our loans held for sale, for which we elected the fair value option. See Note 12. Fair Value Measurements for the assumptions used in our fair value model.
Personal Loans
Student Loans
Home Loans
Total
September 30, 2023
Unpaid principal
$14,177,004 $5,929,047 $110,320 $20,216,371 
Accumulated interest
105,156 26,497 163 131,816 
Cumulative fair value adjustments(1)
568,836 86,000 (9,187)645,649 
Total fair value of loans(2)
$14,850,996 $6,041,544 $101,296 $20,993,836 
December 31, 2022
Unpaid principal
$8,283,400 $4,794,517 $77,705 $13,155,622 
Accumulated interest
55,673 19,433 151 75,257 
Cumulative fair value adjustments(1)
271,361 63,227 (8,393)326,195 
Total fair value of loans(2)
$8,610,434 $4,877,177 $69,463 $13,557,074 
__________________
(1) During the nine months ended September 30, 2023, the cumulative fair value adjustments for personal loans were primarily impacted by higher origination volume and higher coupon rates, partially offset by higher benchmark rates.
(2) Each component of the fair value of loans is impacted by charge-offs during the period. Our fair value assumption for annual default rate incorporates fair value markdowns on loans beginning when they are 10 days or more delinquent, with additional markdowns at 30, 60 and 90 days past due.
The following table summarizes the aggregate fair value of loans 90 days or more delinquent. As delinquent personal loans and student loans are charged off after 120 days of delinquency, amounts presented below represent the fair value of loans that are 90 to 120 days delinquent.
Personal Loans
Student Loans
Home Loans
Total
September 30, 2023
Unpaid principal balance
$68,432 $8,502 $213 $77,147 
Accumulated interest
3,400 335 — 3,735 
Cumulative fair value adjustments(1)
(58,676)(5,104)(140)(63,920)
Fair value of loans 90 days or more delinquent$13,156 $3,733 $73 $16,962 
December 31, 2022
Unpaid principal balance$27,989 $6,435 $— $34,424 
Accumulated interest1,207 304 — 1,511 
Cumulative fair value adjustments(1)
(25,022)(3,332)— (28,354)
Fair value of loans 90 days or more delinquent$4,174 $3,407 $— $7,581 
__________________
(1) Our fair value assumption for annual default rate incorporates fair value markdowns on loans beginning when they are 10 days or more delinquent, with additional markdowns at 30, 60 and 90 days past due.
Transfers of Financial Assets
We regularly transfer financial assets and account for such transfers as either sales or secured borrowings depending on the facts and circumstances of the transfer. When a transfer of financial assets qualifies as a sale, in many instances we have continuing involvement as the servicer of those financial assets. As we expect the benefits of servicing to be more than just adequate, we recognize a servicing asset. Further, in the case of securitization-related transfers that qualify as sales, we have additional continuing involvement as an investor, albeit at insignificant levels relative to the expected gains and losses of the securitization. In instances where a transfer is accounted for as a secured borrowing, we perform servicing (but we do not recognize a servicing asset) and typically maintain a significant investment relative to the expected gains and losses of the securitization. In whole loan sales, we do not have a residual financial interest in the loans, nor do we have any other power over the loans that would constrain us from recognizing a sale. Additionally, we generally have no repurchase requirements related to transfers of personal loans, student loans and non-government-sponsored enterprise home loans other than standard origination representations and warranties, for which we record a liability based on expected repurchase obligations. For government-sponsored enterprise (“GSE”) home loans, we have customary GSE repurchase requirements, which do not constrain sale treatment but result in a liability for the expected repurchase requirement.
There were no loan securitization transfers qualifying for sale accounting treatment during the nine months ended September 30, 2023 and 2022.
Deconsolidation of debt reflects the impacts of previously consolidated VIEs that became deconsolidated during the period because we no longer hold a significant financial interest in the underlying securitization entity, which can fluctuate from period to period. Gains and losses on deconsolidations are presented within noninterest income—securitizations in the condensed consolidated statements of operations and comprehensive loss. During the nine months ended September 30, 2023, we had deconsolidation of debt on student loans of $45.9 million. The impact on earnings from the deconsolidation was immaterial. During the three months ended September 30, 2023, we did not have any deconsolidation of debt. During the three and nine months ended September 30, 2022, we did not have any deconsolidations of debt.
The following table summarizes our whole loan sales:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Personal loans
Fair value of consideration received:
Cash$15,098 $773,005 $66,571 $2,954,723 
Servicing assets recognized767 6,789 1,655 20,872 
Repurchase liabilities recognized(45)(2,074)(405)(7,161)
Total consideration received
15,820 777,720 67,821 2,968,434 
Aggregate unpaid principal balance and accrued interest of loans sold
15,098 753,259 65,420 2,864,351 
Gain from loan sales$722 $24,461 $2,401 $104,083 
Sale execution(1)
105.1 %103.5 %104.3 %103.9 %
Student loans
Fair value of consideration received:
Cash$— $77,089 $98,624 $883,859 
Servicing assets recognized— 460 2,792 9,275 
Repurchase liabilities recognized— (13)(16)(134)
Total consideration— 77,536 101,400 893,000 
Aggregate unpaid principal balance and accrued interest of loans sold
— 74,311 99,916 881,922 
Gain from loan sales$— $3,225 $1,484 $11,078 
Sale execution(1)
— %104.4 %101.5 %101.3 %
Home loans
Fair value of consideration received:
Cash$331,364 $244,788 $676,235 $926,707 
Servicing assets recognized3,376 3,432 7,133 12,152 
Repurchase liabilities recognized(468)(269)(1,315)(1,004)
Total consideration
334,272 247,951 682,053 937,855 
Aggregate unpaid principal balance and accrued interest of loans sold
333,951 252,168 678,561 960,680 
Gain (loss) from loan sales$321 $(4,217)$3,492 $(22,825)
Sale execution(1)
100.2 %98.4 %100.7 %97.7 %
_____________________
(1)Sale execution represents the ratio of cash proceeds and servicing assets recognized to the aggregate unpaid principal balance and accrued interest of the loans sold. Amounts included in repurchase liabilities are excluded from the calculation, as they typically would not materially differ from the fair value markdown on the loans over the repurchase period had they been held on balance sheet and entered delinquency.
For certain transferred loans that qualified for sale accounting and are, therefore, off-balance sheet, we have continuing involvement through our servicing agreements. For such loans, our exposure to loss is generally limited to the extent we would be required to repurchase such a loan due to a breach of representations and warranties associated with the loan transfer or servicing contract.
The following table presents information about the unpaid principal balances of loans originated by us and subsequently transferred, but with which we have continuing involvement:
Personal Loans
Student Loans
Home Loans
Total
September 30, 2023
Loans in delinquency (30+ days past due)
$60,634 $58,308 $26,382 $145,324 
Total loans in delinquency96,718 130,497 26,382 253,597 
Total transferred loans serviced(1)
1,696,118 6,462,082 5,457,959 13,616,159 
December 31, 2022
Loans in delinquency (30+ days past due)
$64,654 $46,986 $16,510 $128,150 
Total loans in delinquency108,991 115,818 16,510 241,319 
Total transferred loans serviced(1)
2,995,601 7,586,031 5,134,306 15,715,938 
_____________________
(1)Total transferred loans serviced includes loans in delinquency, as well as loans in repayment, loans in-school/grace period/deferment (related to student loans), and loans in forbearance. The vast majority of total transferred loans serviced represent loans in repayment as of the dates indicated.

The following table presents additional information about the servicing cash flows received and net charge-offs related to loans originated by us and subsequently transferred, but with which we have continuing involvement:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Personal loans
Servicing fees collected from transferred loans
$4,033 $9,020 $15,080 $25,845 
Charge-offs, net of recoveries, of transferred loans(1)
40,916 24,190 128,442 62,852 
Student loans
Servicing fees collected from transferred loans
5,375 8,224 20,967 28,437 
Charge-offs, net of recoveries, of transferred loans(1)
10,139 7,372 29,297 24,784 
Home loans
Servicing fees collected from transferred loans
3,662 3,686 10,481 9,252 
Total
Servicing fees collected from transferred loans
$13,070 $20,930 $46,528 $63,534 
Charge-offs, net of recoveries, of transferred loans(1)
51,055 31,562 157,739 87,636 
_____________________
(1)Personal loan and student loan charge-offs, net of recoveries, are impacted by the timing of charge-off sales performed on behalf of the purchasers of our loans, which lower the net amount disclosed.
Loans Held for Investment
Loan Portfolio Composition and Aging
The following table presents the amortized cost basis of our credit card and commercial and consumer banking portfolios (excluding accrued interest and before the allowance for credit losses) by either current status or delinquency status:
Delinquent Loans
Current30–59 Days60–89 Days
≥ 90 Days(1)
Total Delinquent Loans
Total Loans(2)
September 30, 2023
Credit card$271,827 $5,005 $4,078 $11,294 $20,377 $292,204 
Commercial and consumer banking:
Commercial real estate105,709 — — — — 105,709 
Commercial and industrial5,684 288 — 466 754 6,438 
Residential real estate and other consumer(3)
3,342 — — — — 3,342 
Total commercial and consumer banking114,735 288 — 466 754 115,489 
Total loans
$386,562 $5,293 $4,078 $11,760 $21,131 $407,693 
December 31, 2022
Credit card$225,165 $4,670 $3,626 $10,498 $18,794 $243,959 
Commercial and consumer banking:
Commercial real estate89,544 — — — — 89,544 
Commercial and industrial7,636 — 1 — 1 7,637 
Residential real estate and other consumer(3)
2,966 — — — — 2,966 
Total commercial and consumer banking100,146 — 1 — 1 100,147 
Total loans$325,311 $4,670 $3,627 $10,498 $18,795 $344,106 
______________
(1)All of the credit cards ≥ 90 days past due continued to accrue interest. As of the dates indicated, there were no credit cards on nonaccrual status. As of the dates indicated, commercial and consumer banking loans on nonaccrual status were immaterial.
(2)For credit card, the balance is presented before allowance for credit losses of $50,055 and $39,110 as of September 30, 2023 and December 31, 2022, respectively, and accrued interest of $5,092 and $4,315, respectively. For commercial and consumer banking, the balance is presented before allowance for credit losses of $1,868 and $1,678, respectively, and accrued interest of $386 and $324, respectively.
(3)Primarily includes residential real estate loans acquired in the Bank Merger, for which we did not elect the fair value option.
Credit Quality Indicators
Credit Card
The following table presents the amortized cost basis of our credit card portfolio (excluding accrued interest and before the allowance for credit losses) based on FICO scores, which are obtained at origination of the account and are refreshed monthly thereafter. The pools estimate the likelihood of borrowers with similar FICO scores to pay credit obligations based on aggregate credit performance data.
FICOSeptember 30, 2023December 31, 2022
≥ 800$22,999 $14,421 
780 – 79915,905 11,327 
760 – 77918,180 12,179 
740 – 75920,179 14,501 
720 – 73925,172 19,343 
700 – 71930,789 26,239 
680 – 69936,490 31,543 
660 – 67934,714 31,958 
640 – 65925,265 25,959 
620 – 63915,922 15,566 
600 – 6199,625 8,968 
≤ 59936,964 31,955 
Total credit card$292,204 $243,959 
Commercial and Consumer Banking
We analyze loans in our commercial and consumer banking portfolio by classification based on their associated credit risk, and perform an analysis on an ongoing basis as new information is obtained. Risk rating classifications are further described below. Loans with a lower expectation of credit losses are classified as Pass, while loans with a higher expectation of credit losses are classified as Substandard.
•Pass — Loans that management believes will fully repay in accordance with the contractual loan terms.
•Watch — Loans that management believes will fully repay in accordance with the contractual loan terms, but for which certain credit attributes have changed from origination and warrant further monitoring.
•Special mention — Loans with a potential weakness or weaknesses that deserves management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loan or our credit position at some future date.
•Substandard — Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the full repayment. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.
The following table presents the amortized cost basis of our commercial and consumer banking portfolio (excluding accrued interest and before the allowance for credit losses) by origination year and credit quality indicator:
Term Loans by Origination Year
September 30, 202320232022202120202019PriorTotal Term LoansRevolving Loans
Commercial real estate
Pass$20,550 $34,042 $5,667 $4,577 $9,396 $18,846 $93,078 $190 
Watch1,238 4,609 1,658 — 217 2,760 10,482 — 
Special mention— — — — — 1,577 1,577 — 
Substandard— — — — — 382 382 — 
Total commercial real estate21,788 38,651 7,325 4,577 9,613 23,565 105,519 190 
Commercial and industrial
Pass56 — — 67 100 4,950 5,173 50 
Watch48 — — — 18 11 77 — 
Substandard— — — — — 1,138 1,138 — 
Total commercial and industrial104 — — 67 118 6,099 6,388 50 
Residential real estate and other consumer
Pass735 — — — — 2,480 3,215 87 
Watch— — — — — 40 40 — 
Total residential real estate and other consumer735 — — — — 2,520 3,255 87 
Total commercial and consumer banking
$22,627 $38,651 $7,325 $4,644 $9,731 $32,184 $115,162 $327