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VARIABLE INTEREST ENTITIES | 3 Months Ended
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Mar. 31, 2021
Equity Method Investments and Joint Ventures [Abstract] |
VARIABLE INTEREST ENTITIES | NOTE 6 - VARIABLE INTEREST ENTITIES Citizens is involved in various entities that are considered VIEs, including investments in limited partnerships that sponsor affordable housing projects, limited liability companies that sponsor renewable energy projects or asset-backed securities, and lending to special purpose entities. Citizens’ maximum exposure to loss as a result of its involvement with these entities is limited to the balance sheet carrying amount of its investment in equity and asset-backed securities, unfunded commitments, and outstanding principal balance of loans to special purpose entities. A summary of these investments is presented below:
(in millions) | March 31, 2021 |  | December 31, 2020
Lending to special purpose entities included in loans and leases | $1,269 |  |  | $1,295 |
LIHTC investment included in other assets | 1,776 |  |  | 1,687 |
LIHTC unfunded commitments included in other liabilities | 874 |  |  | 875 |
Investment in asset-backed securities included in HTM securities | 854 |  |  | 893 |
Renewable energy investments included in other assets | 459 |  |  | 403 |
Lending to Special Purpose Entities Citizens provides lending facilities to third-party sponsored special purpose entities. Because the sponsor for each respective entity has the power to direct how proceeds from the Company are utilized, as well as maintains responsibility for any associated servicing commitments, Citizens is not the primary beneficiary of these entities. Accordingly, Citizens does not consolidate these VIEs on the Consolidated Balance Sheets. As of March 31, 2021 and December 31, 2020, the lending facilities had aggregate unpaid principal balances of $1.3 billion in each period, and undrawn commitments to extend credit of $1.7 billion and $1.5 billion, respectively. Low Income Housing Tax Credit Partnerships The purpose of the Company’s equity investments is to assist in achieving the goals of the Community Reinvestment Act and to earn an adequate return of capital. LIHTC partnerships are managed by unrelated general partners that have the power to direct the activities which most significantly affect the performance of the partnerships. Citizens is therefore not the primary beneficiary of any LIHTC partnerships. Accordingly, Citizens does not consolidate these VIEs and accounts for these investments in other assets on the Consolidated Balance Sheets. Citizens applies the proportional amortization method to account for its LIHTC investments. Under the proportional amortization method, the Company applies a practical expedient and amortizes the initial cost of the investment in proportion to the tax credits received in the current period as compared to the total tax credits expected to be received over the life of the investment. The amortization and tax benefits are included as a component of income tax expense. The tax credits received are reported as a reduction of income tax expense (or an increase to income tax benefit) related to these transactions. The following table presents other information related to the Company’s affordable housing tax credit investments:
|  |  | Three Months Ended March 31,
(in millions) |  |  |  |  | 2021 |  | 2020
Tax credits included in income tax expense |  |  |  |  | $51 |  |  | $41 |
Other tax benefits included in income tax expense |  |  |  |  | 12 |  |  | 10 |
Total tax benefit included in income tax expense |  |  |  |  | 63 |  |  | 51 |
Less: Amortization expense included in income tax expense |  |  |  |  | 53 |  |  | 43 |
Net benefit from affordable housing tax credit investments included in income tax expense |  |  |  |  | $10 |  |  | $8 |
No LIHTC investment impairment losses were recognized three months ended March 31, 2021 and 2020, respectively. Asset-backed securities Citizens invests in certain asset-backed securities that are sponsored by legal entities determined to be VIEs. Each reporting period, Citizens is required to evaluate any changes in its involvement with the VIEs that issue the asset-backed securities to determine if the Company is required to consolidate the VIE. As of March 31, 2021, the Company concluded, based on the fact that the activities which most significantly affect the performance of the VIE are controlled by the equity holder in the VIE, and not by Citizens; therefore, Citizens is not the primary beneficiary of the VIE and does not consolidate the VIE. The Company accounts for its investment in the debt issued by these entities as HTM asset-backed securities on the Consolidated Balance Sheets. Renewable Energy Entities The Company’s investments in renewable energy entities provide benefits from a return generated by government incentives plus other tax attributes that are associated with tax ownership (e.g., tax depreciation). As a tax equity investor, Citizens does not have the power to direct the activities which most significantly affect the performance of these entities and therefore is not the primary beneficiary of any renewable energy entities. Accordingly, Citizens does not consolidate these VIEs and accounts for these investments in other assets on the Consolidated Balance Sheets.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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