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VARIABLE INTEREST ENTITIES | 12 Months Ended
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Dec. 31, 2022
Equity Method Investments and Joint Ventures [Abstract] |
VARIABLE INTEREST ENTITIES | NOTE 11 - VARIABLE INTEREST ENTITIES Citizens makes equity investments in various entities that are considered VIEs, as defined by GAAP. A VIE typically does not have sufficient equity at risk to finance its activities without additional subordinated financial support from other parties. The Company’s variable interest arises from contractual, ownership or other monetary interests in the entity, which change with fluctuations in the fair value of the entity's net assets. Citizens consolidates a VIE if it is the primary beneficiary of the entity. Citizens is the primary beneficiary of a VIE if its variable interest provides it with the power to direct the activities that most significantly impact the VIE and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to the VIE. To determine whether or not a variable interest held could potentially be significant to the VIE, the company considers both qualitative and quantitative factors regarding the nature, size and form of its involvement with the VIE. Citizens assesses whether or not it is the primary beneficiary of a VIE on an ongoing basis. 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:
| December 31,
(in millions) | 2022 |  | 2021
Lending to special purpose entities included in loans and leases | $4,578 |  |  | $2,646 |
LIHTC investment included in other assets | 2,230 |  |  | 1,978 |
LIHTC unfunded commitments included in other liabilities | 1,046 |  |  | 927 |
Asset-backed investments included in HTM securities | 581 |  |  | 737 |
Renewable energy investments included in other assets | 374 |  |  | 429 |
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 December 31, 2022 and 2021, the lending facilities had aggregate unpaid principal balances of $4.6 billion and $2.6 billion, respectively, and undrawn commitments to extend credit of $2.4 billion and $1.9 billion, respectively. For more information on commitments to extend credit see Note 19. Low Income Housing Tax Credit Partnerships The purpose of the Company’s equity investments is to assist in achieving the goals of the CRA 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 and, therefore, Citizens is not the primary beneficiary of these partnerships. Accordingly, Citizens does not consolidate these VIEs. 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 related to these transactions are reported as a reduction of income tax expense (or an increase to income tax benefit). The following table presents information related to the Company’s affordable housing tax credit investments:
| Year Ended December 31,
(in millions) | 2022 |  | 2021 |  | 2020
Tax credits included in income tax expense | $236 |  |  | $202 |  |  | $159 |
Other tax benefits included in income tax expense | 59 |  |  | 48 |  |  | 38 |
Total tax benefits included in income tax expense | 295 |  |  | 250 |  |  | 197 |
Less: Amortization included in income tax expense | 247 |  |  | 208 |  |  | 168 |
Net benefit from affordable housing tax credit investments included in income tax expense | $48 |  |  | $42 |  |  | $29 |
No LIHTC investment impairment losses were recognized during the years ended December 31, 2022, 2021 and 2020. Asset-backed securities The Company’s investments in asset-backed securities are collateralized by education loans sold to a third-party sponsored VIE. Citizens acts as primary servicer for the sold educational loans and receives a servicing fee. A third-party special servicer is responsible for all loans that become significantly delinquent. As of December 31, 2022, the Company concluded that their investment in asset-backed securities, as well as the primary servicing fee, are considered variable interests in the VIE since some of the losses of the VIE could be absorbed by the Company’s interest in the asset-backed securities or the primary servicing fee. However, Citizens did not control the determination of the assets purchased by the VIE and does not control the servicing activities on significantly delinquent loans. Since these activities significantly impact the economic performance of the VIE, the Company has concluded that Citizens is not the primary beneficiary. Accordingly, Citizens does not consolidate the VIE. Renewable Energy Entities The Company’s investments in certain 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 these entities. Accordingly, Citizens does not consolidate these VIEs.

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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 https://asc.fasb.org/topic&trid=2196965 + Details
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