Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 22, 2022 | |
Cover [Abstract] | ||
Document type | 10-Q | |
Document quarterly report | true | |
Document period end date | Mar. 31, 2022 | |
Document transition report | false | |
Entity file number | 001-33378 | |
Entity registrant name | DISCOVER FINANCIAL SERVICES | |
Entity incorporation, state | DE | |
Entity tax identification number | 36-2517428 | |
Entity address, address line one | 2500 Lake Cook Road | |
Entity address, city or town | Riverwoods | |
Entity address, state or province | IL | |
Entity address, postal zip code | 60015 | |
Entity phone number, city area code | 224 | |
Entity phone number, local phone number | 405-0900 | |
Title of 12(b) security | Common Stock, par value $0.01 per share | |
Trading symbol | DFS | |
Security exchange name | NYSE | |
Entity current reporting status | Yes | |
Entity interactive data current | Yes | |
Entity filer category | Large Accelerated Filer | |
Smaller reporting company | false | |
Emerging growth company | false | |
Entity shell company | false | |
Entity common stock, shares outstanding | 280,965,096 | |
Entity central index key | 0001393612 | |
Current fiscal year end date | --12-31 | |
Document fiscal year focus | 2022 | |
Document fiscal period focus | Q1 | |
Amendment flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 9,625 | $ 8,750 |
Restricted cash | 18 | 2,582 |
Investment securities (includes available-for-sale securities of $5,772 and $6,700 reported at fair value with associated amortized cost of $5,781 and $6,549 at March 31, 2022 and December 31, 2021, respectively) | 5,977 | 6,904 |
Loan receivables | ||
Loan receivables | 93,471 | 93,684 |
Allowance for credit losses | (6,647) | (6,822) |
Net loan receivables | 86,824 | 86,862 |
Premises and equipment, net | 984 | 983 |
Goodwill | 255 | 255 |
Other assets | 3,729 | 3,906 |
Total assets | 107,412 | 110,242 |
Deposits | ||
Interest-bearing deposit accounts | 70,941 | 70,818 |
Non-interest bearing deposit accounts | 1,541 | 1,575 |
Total deposits | 72,482 | 72,393 |
Short-term borrowings | 0 | 1,750 |
Long-term borrowings | 17,132 | 18,477 |
Accrued expenses and other liabilities | 4,365 | 4,214 |
Total liabilities | 93,979 | 96,834 |
Commitments, contingencies and guarantees (Notes 9, 12 and 13) | ||
Stockholders' Equity | ||
Common stock, par value $0.01 per share; 2,000,000,000 shares authorized; 569,504,031 and 568,830,897 shares issued at March 31, 2022 and December 31, 2021, respectively | 6 | 6 |
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 1,056 | 1,056 |
Additional paid-in capital | 4,390 | 4,369 |
Retained earnings | 25,833 | 24,766 |
Accumulated other comprehensive loss | (213) | (94) |
Treasury stock, at cost; 288,539,871 and 280,502,577 shares at March 31, 2022 and December 31, 2021, respectively | (17,639) | (16,695) |
Total stockholders' equity | 13,433 | 13,408 |
Total liabilities and stockholders' equity | 107,412 | 110,242 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Assets | ||
Restricted cash | 18 | 2,582 |
Loan receivables | ||
Loan receivables | 24,231 | 25,449 |
Allowance for credit losses | (1,231) | (1,371) |
Other assets | 4 | 4 |
Deposits | ||
Long-term borrowings | 7,715 | 9,539 |
Accrued expenses and other liabilities | $ 5 | $ 6 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Statement of Financial Position [Abstract] | |||
Available-for-sale investment securities, fair value | [1] | $ 5,772 | $ 6,700 |
Available-for-sale investment securities, amortized cost | [1] | $ 5,781 | $ 6,549 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Common Stock, Shares Authorized | 2,000,000,000 | 2,000,000,000 | |
Common Stock, Shares, Issued | 569,504,031 | 568,830,897 | |
Preferred stock, par or stated value per Share | $ 0.01 | $ 0.01 | |
Preferred Stock, Shares Authorized | 200,000,000 | 200,000,000 | |
Preferred Stock, Shares Issued | 10,700 | 10,700 | |
Preferred Stock, Shares Outstanding | 10,700 | 10,700 | |
Treasury Stock, Shares | 288,539,871 | 280,502,577 | |
[1] | Available-for-sale investment securities are reported at fair value. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Interest income | ||
Credit card loans | $ 2,268 | $ 2,154 |
Other loans | 428 | 437 |
Investment securities | 36 | 50 |
Other interest income | 4 | 5 |
Total interest income | 2,736 | 2,646 |
Interest expense | ||
Deposits | 139 | 193 |
Short-term borrowings | 1 | 0 |
Long-term borrowings | 117 | 123 |
Total interest expense | 257 | 316 |
Net interest income | 2,479 | 2,330 |
Provision for credit losses | 154 | (365) |
Net interest income after provision for credit losses | 2,325 | 2,695 |
Other income | ||
Discount and interchange revenue, net | 320 | 241 |
Protection products revenue | 44 | 43 |
Loan fee income | 140 | 107 |
Transaction processing revenue | 57 | 51 |
Unrealized (losses) gains on equity investments | (188) | 0 |
Realized gains on equity investments | 26 | 0 |
Other income | 24 | 23 |
Total other income | 423 | 465 |
Other expense | ||
Employee compensation and benefits | 500 | 506 |
Marketing and business development | 192 | 154 |
Information processing and communications | 125 | 109 |
Professional fees | 177 | 182 |
Premises and equipment | 24 | 24 |
Other expense | 112 | 106 |
Total other expense | 1,130 | 1,081 |
Income before income taxes | 1,618 | 2,079 |
Income tax expense | 376 | 486 |
Net income | 1,242 | 1,593 |
Net income (loss) available to common stockholders, diluted | 1,205 | 1,546 |
Net income allocated to common stockholders | $ 1,205 | $ 1,546 |
Basic earnings per common share | $ 4.23 | $ 5.04 |
Diluted earnings per common share | $ 4.22 | $ 5.04 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,242 | $ 1,593 |
Other comprehensive loss, net of tax | ||
Unrealized losses on available-for-sale investment securities, net of tax | (121) | (53) |
Unrealized gains on cash flow hedges, net of tax | 2 | 1 |
Other comprehensive loss | (119) | (52) |
Comprehensive income | $ 1,123 | $ 1,541 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Treasury Stock [Member] | Series C Preferred Stock [Member] | Series C Preferred Stock [Member]Retained Earnings [Member] | Series D Preferred Stock | Series D Preferred StockRetained Earnings [Member] |
Preferred stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020 | 11,000 | ||||||||||
Common stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020 | 567,898,000 | ||||||||||
Stockholders' equity, balance at beginning of period at Dec. 31, 2020 | $ 10,884 | $ 1,056 | $ 6 | $ 4,257 | $ 19,955 | $ 45 | $ (14,435) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 1,593 | 1,593 | |||||||||
Other comprehensive loss | (52) | (52) | |||||||||
Purchases of treasury stock | (119) | (119) | |||||||||
Common stock issued under employee benefit plans (in shares) | 26,000 | ||||||||||
Common stock issued under employee benefit plans | 2 | $ 0 | 2 | ||||||||
Common stock issued and stock-based compensation expense (in shares) | 656,000 | ||||||||||
Common stock issued and stock-based compensation expense | 21 | $ 0 | 21 | ||||||||
Dividends — common stock | (136) | (136) | |||||||||
Dividends — preferred stock | $ (16) | $ (16) | $ (23) | $ (23) | |||||||
Preferred stock, shares outstanding, balance at end of period (in shares) at Mar. 31, 2021 | 11,000 | ||||||||||
Common stock, shares outstanding, balance at end of period (in shares) at Mar. 31, 2021 | 568,580,000 | ||||||||||
Stockholders' equity, balance at end of period at Mar. 31, 2021 | $ 12,154 | $ 1,056 | $ 6 | 4,280 | 21,373 | (7) | (14,554) | ||||
Preferred stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021 | 10,700 | 11,000 | |||||||||
Common stock, shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021 | 568,831,000 | ||||||||||
Stockholders' equity, balance at beginning of period at Dec. 31, 2021 | $ 13,408 | $ 1,056 | $ 6 | 4,369 | 24,766 | (94) | (16,695) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 1,242 | 1,242 | |||||||||
Other comprehensive loss | (119) | (119) | |||||||||
Purchases of treasury stock | (944) | (944) | |||||||||
Common stock issued under employee benefit plans (in shares) | 22,000 | ||||||||||
Common stock issued under employee benefit plans | 2 | $ 0 | 2 | ||||||||
Common stock issued and stock-based compensation expense (in shares) | 651,000 | ||||||||||
Common stock issued and stock-based compensation expense | 19 | $ 0 | 19 | ||||||||
Dividends — common stock | $ (144) | (144) | |||||||||
Dividends — preferred stock | $ (16) | $ (16) | $ (15) | $ (15) | |||||||
Preferred stock, shares outstanding, balance at end of period (in shares) at Mar. 31, 2022 | 10,700 | 11,000 | |||||||||
Common stock, shares outstanding, balance at end of period (in shares) at Mar. 31, 2022 | 569,504,000 | ||||||||||
Stockholders' equity, balance at end of period at Mar. 31, 2022 | $ 13,433 | $ 1,056 | $ 6 | $ 4,390 | $ 25,833 | $ (213) | $ (17,639) |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Dividends declared, common stock (dollars per share) | $ 0.50 | $ 0.44 |
Series C Preferred Stock [Member] | ||
Dividends declared, preferred stock (dollars per share) | 2,750 | 2,750 |
Series D Preferred Stock | ||
Dividends declared, preferred stock (dollars per share) | $ 3,062.5 | $ 4,611 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows provided by operating activities | ||
Net income | $ 1,242 | $ 1,593 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 154 | (365) |
Deferred income taxes | (10) | 232 |
Depreciation and amortization | 139 | 119 |
Amortization of deferred revenues | (76) | (74) |
Net unrealized and realized losses on investments and other assets | 173 | 10 |
Other, net | 20 | 23 |
Changes in assets and liabilities: | ||
Increase in other assets | (127) | (150) |
Increase in accrued expenses and other liabilities | 219 | 120 |
Net cash provided by operating activities | 1,734 | 1,508 |
Cash flows provided by investing activities | ||
Maturities of other short-term investments | 0 | 2,200 |
Maturities of available-for-sale investment securities | 769 | 404 |
Maturities of held-to-maturity investment securities | 12 | 20 |
Purchases of held-to-maturity investment securities | (14) | (16) |
Net change in principal on loans originated for investment | (103) | 3,642 |
Proceeds from the sale of available-for-sale securities | 0 | 0 |
Proceeds from the sale of other investments | 71 | 0 |
Purchases of other investments | (23) | (21) |
Purchases of premises and equipment | (51) | (41) |
Net cash provided by investing activities | 661 | 6,188 |
Cash flows used for by financing activities | ||
Net change in short-term borrowings | (1,750) | 0 |
Net change in deposits | 82 | (165) |
Proceeds from issuance of securitized debt | 1,242 | 0 |
Maturities and repayment of securitized debt | (2,556) | (7) |
Maturities and repayment of other long-term borrowings | 0 | (163) |
Proceeds from issuance of common stock | 2 | 2 |
Purchases of treasury stock | (944) | (119) |
Dividends paid on common and preferred stock | (160) | (159) |
Net cash used for financing activities | (4,084) | (611) |
Net (decrease) increase in cash, cash equivalents and restricted cash | (1,689) | 7,085 |
Cash, cash equivalents and restricted cash, at the beginning of the period | 11,332 | 13,589 |
Cash, cash equivalents and restricted cash, at the end of the period | 9,643 | 20,674 |
Reconciliation of cash, cash equivalents and restricted cash | ||
Cash and cash equivalents | 9,625 | 20,348 |
Restricted cash | $ 18 | $ 326 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Description of Business Discover Financial Services ("DFS" or the "Company") is a digital banking and payment services company. The Company is a bank holding company under the Bank Holding Company Act of 1956 and a financial holding company under the Gramm-Leach-Bliley Act. Therefore, the Company is subject to oversight, regulation and examination by the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Company provides digital banking products and services and payment services through its subsidiaries. The Company offers its customers credit card loans, private student loans, personal loans, home loans and deposit products. The Company also operates the Discover Network, the PULSE network ("PULSE") and Diners Club International ("Diners Club"), collectively known as the Discover Global Network. The Discover Network processes transactions for Discover-branded credit and debit cards and provides payment transaction processing and settlement services. PULSE operates an electronic funds transfer network, providing financial institutions issuing debit cards on the PULSE network with access to ATMs domestically and internationally, as well as merchant acceptance throughout the United States of America ("U.S.") for debit card transactions. Diners Club is a global payments network of licensees, which are generally financial institutions, that issue Diners Club branded credit and charge cards and/or provide card acceptance services. The Company manages its business activities in two segments, Digital Banking and Payment Services, based on the products and services provided. See Note 16: Segment Disclosures for a detailed description of each segment's operations and the allocation conventions used in business segment reporting. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for the fair presentation of results for the interim period. All such adjustments are of a normal, recurring nature. The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. The Company believes that the estimates used in the preparation of the condensed consolidated financial statements are reasonable. Actual results could differ from these estimates. These interim condensed consolidated financial statements should be read in conjunction with the Company's 2021 audited consolidated financial statements filed with the Company's annual report on Form 10-K for the year ended December 31, 2021. Recently Issued Accounting Pronouncements (Not Yet Adopted) In March 2022, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . The ASU eliminates the troubled debt restructuring ("TDR") recognition and measurement guidance and enhances disclosures for modifications of receivables from borrowers experiencing financial difficulty. ASU 2022-02 no longer requires the application of a discounted cash flow method for any modified receivables when measuring expected credit losses. The ASU also refines existing credit-related disclosures by requiring disclosure of current-period gross charge-offs of receivables by year of origination. The amendments in the ASU are to be applied prospectively to modifications and disclosures of gross charge-offs; however, adoption on a modified retrospective basis is permitted for the effect on the allowance for credit losses related to the elimination of the TDR recognition and measurement guidance. The ASU is effective for the Company on January 1, 2023, with early adoption permitted. Management does not expect the amendments to have a material impact on the Company's financial statements. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments The Company's investment securities consist of the following (dollars in millions): March 31, December 31, U.S. Treasury (1) and U.S. GSE (2) securities $ 5,612 $ 6,514 Residential mortgage-backed securities - Agency (2) 365 390 Total investment securities $ 5,977 $ 6,904 (1) Includes $18 million and $27 million of U.S. Treasury securities pledged as swap collateral as of March 31, 2022 and December 31, 2021, respectively. (2) Consists of securities issued by Fannie Mae, Freddie Mac, Ginnie Mae, or the Federal Home Loan Bank. The amortized cost, gross unrealized gains and losses and fair value of available-for-sale and held-to-maturity investment securities are as follows (dollars in millions): Amortized Gross Gross Fair Value At March 31, 2022 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 5,619 $ 25 $ (32) $ 5,612 Residential mortgage-backed securities - Agency 162 — (2) 160 Total available-for-sale investment securities $ 5,781 $ 25 $ (34) $ 5,772 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 205 $ — $ (7) $ 198 Total held-to-maturity investment securities $ 205 $ — $ (7) $ 198 At December 31, 2021 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 6,368 $ 146 $ — $ 6,514 Residential mortgage-backed securities - Agency 181 5 — 186 Total available-for-sale investment securities $ 6,549 $ 151 $ — $ 6,700 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 204 $ 3 $ (1) $ 206 Total held-to-maturity investment securities $ 204 $ 3 $ (1) $ 206 (1) Available-for-sale investment securities are reported at fair value. (2) Held-to-maturity investment securities are reported at amortized cost. (3) Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. The Company invests in U.S. Treasury obligations and securities issued by government agencies and government-sponsored enterprises of the U.S. ("U.S. GSEs"), which have long histories with no credit losses and are explicitly or implicitly guaranteed by the U.S. federal government. Therefore, management has concluded that there is no expectation of non-payment on its investment securities and does not record an allowance for credit losses on these investments. The following table provides information about available-for-sale investment securities with aggregate gross unrealized losses and the length of time that individual investment securities have been in a continuous unrealized loss position (dollars in millions): Number of Securities in a Loss Position Less than 12 months More than 12 months Fair Unrealized Fair Unrealized At March 31, 2022 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 18 $ 2,103 $ (32) $ — $ — Residential mortgage-backed securities - Agency 25 $ 144 $ (1) $ 6 $ (1) At December 31, 2021 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 2 $ 110 NM $ — $ — Residential mortgage-backed securities - Agency 1 $ 7 NM $ — $ — There were no proceeds from sales or recognized gains or losses on available-for-sale securities during the three months ended March 31, 2022 and 2021. See Note 8: Accumulated Other Comprehensive Income for unrealized gains and losses on available-for-sale securities during the three months ended March 31, 2022 and 2021. Maturities of available-for-sale debt securities and held-to-maturity debt securities are provided in the following table (dollars in millions): At March 31, 2022 One Year After One After Five After Ten Total Available-for-Sale Investment Securities — Amortized Cost U.S. Treasury and U.S. GSE securities $ 1,619 $ 3,992 $ 8 $ — $ 5,619 Residential mortgage-backed securities - Agency (1) 1 72 82 7 162 Total available-for-sale investment securities $ 1,620 $ 4,064 $ 90 $ 7 $ 5,781 Held-to-Maturity Investment Securities — Amortized Cost Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 205 $ 205 Total held-to-maturity investment securities $ — $ — $ — $ 205 $ 205 Available-for-Sale Investment Securities — Fair Values U.S. Treasury and U.S. GSE securities $ 1,630 $ 3,974 $ 8 $ — $ 5,612 Residential mortgage-backed securities - Agency (1) 1 71 82 6 160 Total available-for-sale investment securities $ 1,631 $ 4,045 $ 90 $ 6 $ 5,772 Held-to-Maturity Investment Securities — Fair Values Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 198 $ 198 Total held-to-maturity investment securities $ — $ — $ — $ 198 $ 198 (1) Maturities of RMBS are reflective of the contractual maturities of the investment. Other Investments As a part of the Company's community reinvestment initiatives, the Company has made equity investments in certain limited partnerships and limited liability companies that finance the construction and rehabilitation of affordable rental housing and stimulate economic development in low- to moderate-income communities. These investments are accounted for using the equity method of accounting and are recorded within other assets. The related commitment for future investments is recorded in accrued expenses and other liabilities within the condensed consolidated statements of financial condition. The portion of each investment's operating results allocable to the Company reduces the carrying value of the investments and is recorded in other expense within the condensed consolidated statements of income. The Company further reduces the carrying value of the investments by recognizing any amounts that are in excess of future net tax benefits in other expense. The Company earns a return primarily through tax credits allocated to the affordable housing projects and the community revitalization projects. The Company does not consolidate these investments as the Company does not have a controlling financial interest in the investee entities. As of March 31, 2022 and December 31, 2021, the Company had outstanding investments in these entities of $377 million and $388 million, respectively, and related contingent liabilities for unconditional and legally binding delayed equity contributions of $77 million and $92 million, respectively. Of the above outstanding equity investments, the Company had $342 million and $350 million of investments related to affordable housing projects as of March 31, 2022 and December 31, 2021, respectively, which had $68 million and $80 million of related contingent liabilities for unconditional and legally binding delayed equity contributions, respectively. The Company holds non-controlling equity positions in several payment services entities. Most of these investments are not subject to equity method accounting because the Company does not have significant influence over the investee. The common or preferred equity securities that the Company holds typically do not have readily determinable fair values. As a result, the majority of these investments are carried at cost minus impairment, if any. As of March 31, 2022 and December 31, 2021, the carrying value of these investments, which are recorded within other assets on the Company's condensed consolidated statements of financial condition, was $33 million and $36 million, respectively. The Company also holds non-controlling equity positions in payment service entities that have actively traded stock and therefore have readily determinable fair values. As a result, these investments are carried at fair value based on the quoted share prices. As of March 31, 2022 and December 31, 2021, the carrying value of these investments, which are recorded within other assets on the Company's condensed consolidated statements of financial condition, was $272 million and $461 million, respectively. During the three months ended March 31, 2022, the Company recognized unrealized losses of $188 million and realized gains of approximately $23 million on the condensed consolidated statements of income related to these investments. The Company recognized no unrealized or realized losses or gains during the three months ended March 31, 2021. |
Loan Receivables
Loan Receivables | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Loan Receivables | Loan Receivables The Company has two loan portfolio segments: credit card loans and other loans. The Company's classes of receivables within the two portfolio segments are depicted in the following table (dollars in millions): March 31, December 31, Credit card loans (1)(2) $ 73,783 $ 74,369 Other loans (3) Private student loans (4) 10,314 10,113 Personal loans 6,904 6,936 Other loans 2,470 2,266 Total other loans 19,688 19,315 Total loan receivables 93,471 93,684 Allowance for credit losses (6,647) (6,822) Net loan receivables $ 86,824 $ 86,862 (1) Amounts include carrying values of $10.7 billion and $13.3 billion underlying investors' interest in trust debt at March 31, 2022 and December 31, 2021, respectively, and $13.3 billion and $11.9 billion in seller's interest at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. (2) Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $424 million and $423 million at March 31, 2022 and December 31, 2021, respectively. (3) Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $457 million, $41 million and $6 million, respectively, at March 31, 2022 and $443 million, $42 million and $6 million, respectively, at December 31, 2021. (4) Amounts include carrying values of $196 million and $207 million in loans pledged as collateral against the note issued from a private student loan securitization trust at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. Credit Quality Indicators As part of credit risk management activities, on an ongoing basis, the Company reviews information related to the performance of a customer's account with the Company and information from credit bureaus, such as FICO or other credit scores, relating to the customer's broader credit performance. The Company actively monitors key credit quality indicators, including FICO scores and delinquency status, for credit card, private student and personal loans. These indicators are important to understand the overall credit performance of the Company's customers and their ability to repay. FICO scores are generally obtained at the origination of the account and are refreshed monthly or quarterly thereafter to assist in predicting customer behavior. Historically, the Company has noted that accounts with FICO scores below 660 have larger delinquencies and credit losses than those with higher credit scores. The following table provides the distribution of the amortized cost basis (excluding accrued interest receivable presented in other assets) by the most recent FICO scores available for the Company's customers for credit card, private student and personal loan receivables (dollars in millions): Credit Risk Profile by FICO Score March 31, 2022 December 31, 2021 660 and Above Less than 660 660 and Above Less than 660 $ % $ % $ % $ % Credit card loans (1) $ 61,199 83 % $ 12,584 17 % $ 62,262 84 % $ 12,107 16 % Private student loans by origination year (2)(3) 2022 $ 220 98 % $ 4 2 % 2021 1,718 94 % 108 6 % $ 1,251 94 % $ 73 6 % 2020 1,494 96 % 61 4 % 1,561 96 % 59 4 % 2019 1,361 96 % 61 4 % 1,439 96 % 61 4 % 2018 1,073 95 % 59 5 % 1,147 95 % 59 5 % Prior 3,915 94 % 240 6 % 4,215 94 % 248 6 % Total private student loans $ 9,781 95 % $ 533 5 % $ 9,613 95 % $ 500 5 % Personal loans by origination year 2022 $ 984 100 % $ 4 — % 2021 2,941 98 % 54 2 % $ 3,326 99 % $ 37 1 % 2020 1,356 97 % 40 3 % 1,622 98 % 39 2 % 2019 848 94 % 56 6 % 1,052 94 % 62 6 % 2018 343 90 % 38 10 % 435 91 % 44 9 % Prior 206 86 % 34 14 % 276 87 % 43 13 % Total personal loans $ 6,678 97 % $ 226 3 % $ 6,711 97 % $ 225 3 % (1) Amounts include $754 million and $813 million of revolving line-of-credit arrangements that were converted to term loans as a result of a TDR program as of March 31, 2022 and December 31, 2021, respectively. (2) A majority of private student loan originations occur in the third quarter and disbursements can span multiple calendar years. (3) FICO score represents the higher credit score of the cosigner or borrower. Delinquencies are an indicator of credit quality at a point in time. A loan balance is considered delinquent when contractual payments on the loan become 30 days past due. The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent loans in the Company's loan portfolio is shown below for credit card, private student and personal loan receivables (dollars in millions): March 31, 2022 December 31, 2021 30-89 Days 90 or Total Past 30-89 Days 90 or Total Past Credit card loans $ 692 $ 613 $ 1,305 $ 670 $ 562 $ 1,232 Private student loans by origination year (1) 2022 $ — $ — $ — 2021 1 1 2 $ — $ — $ — 2020 6 4 10 4 1 5 2019 11 4 15 9 2 11 2018 15 6 21 14 4 18 Prior 92 28 120 94 29 123 Total private student loans $ 125 $ 43 $ 168 $ 121 $ 36 $ 157 Personal loans by origination year 2022 $ — $ — $ — 2021 8 2 10 $ 5 $ 1 $ 6 2020 7 3 10 7 2 9 2019 10 4 14 11 4 15 2018 5 2 7 6 3 9 Prior 5 2 7 6 3 9 Total personal loans $ 35 $ 13 $ 48 $ 35 $ 13 $ 48 (1) Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. Allowance for Credit Losses The following tables provide changes in the Company's allowance for credit losses (dollars in millions): For the Three Months Ended March 31, 2022 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2021 $ 5,273 $ 843 $ 662 $ 44 $ 6,822 Additions Provision for credit losses (1) 178 45 (30) — 193 Deductions Charge-offs (541) (24) (38) — (603) Recoveries 210 6 19 — 235 Net charge-offs (331) (18) (19) — (368) Balance at March 31, 2022 $ 5,120 $ 870 $ 613 $ 44 $ 6,647 For the Three Months Ended March 31, 2021 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2020 $ 6,491 $ 840 $ 857 $ 38 $ 8,226 Additions Provision for credit losses (1) (377) 36 (4) 3 (342) Deductions Charge-offs (663) (20) (64) — (747) Recoveries 189 6 15 — 210 Net charge-offs (474) (14) (49) — (537) Balance at March 31, 2021 $ 5,640 $ 862 $ 804 $ 41 $ 7,347 (1) Excludes a $39 million and $23 million adjustment of the liability for expected credit losses on unfunded commitments for the three months ended March 31, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in the Company's condensed consolidated statements of financial condition. The allowance for credit losses was approximately $6.6 billion at March 31, 2022, which reflects a $175 million release from the amount of the allowance for credit losses at December 31, 2021. The release in the allowance for credit losses between March 31, 2022 and December 31, 2021, was primarily driven by the continued strength of the loan portfolio's credit performance. In estimating the allowance at March 31, 2022, the Company used a macroeconomic forecast that projected (i) a peak unemployment rate of 5.2%, decreasing to 4.9% and 3.5% through the end of 2022 and 2023, respectively; and (ii) 3.1% and 2.2% annualized growth in the real gross domestic product for 2022 and 2023, respectively. Labor market conditions, which historically have been an important determinant of credit loss trends, continued to improve as of March 31, 2022. The unemployment rate and continuing jobless claims returned to pre-pandemic levels during the first quarter of 2022, and the number of job openings reached near-record levels, reflecting robust demand for labor as the U.S. economy continues to expand post pandemic. In estimating expected credit losses, the Company considered the uncertainties associated with borrower behavior, payment trends and credit performance subsequent to the expiration of government stimulus programs and disaster relief programs, as well as higher consumer price inflation experienced in the first quarter of 2022 and the fiscal and monetary policy responses to that inflation. The Federal Reserve raised its benchmark federal funds rate in March 2022 and signaled additional rate hikes in 2022. In recognition of the evolving macroeconomic environment, the estimation of the allowance for credit losses has required significant management judgment. The forecast period the Company deemed to be reasonable and supportable was 18 months for all periods presented. The 18-month reasonable and supportable forecast period was deemed appropriate based on the observed stability of the economic outlook and relative consistency among the macroeconomic forecasts. For all periods presented, the Company determined that a reversion period of 12 months was appropriate for similar reasons. Due to the uncertainties associated with borrower behavior resulting from government stimulus, disaster relief programs and fiscal and monetary policies, the Company applied a weighted reversion method to provide a more reasonable transition to historical losses for all loan products for all periods presented. The net charge-offs for credit card and personal loans decreased for the three months ended March 31, 2022, when compared to the same period in 2021, primarily due to higher payment rates period-over-period, which decreased the rate of delinquent loans and average balances charged-off. The higher payment rates period-over-period reflect the improvement in household cash flows aided by government stimulus and disaster relief programs that were extended near the end of the first quarter of 2021. The net charge-offs for personal loans continue to benefit from tighter underwriting standards that the Company implemented in early 2020. The net charge-offs for private student loans increased for the three months ended March 31, 2022, when compared to the same period in 2021. This increase was primarily driven by the normalization of credit as the impacts of government stimulus and disaster relief programs began to wane. Net charge-offs of principal are recorded against the allowance for credit losses, as shown in the preceding table. Information regarding net charge-offs of interest and fee revenues on credit card and other loans is as follows (dollars in millions): For the Three Months Ended March 31, 2022 2021 Interest and fees accrued subsequently charged-off, net of recoveries (recorded as a reduction of interest income) $ 66 $ 95 Fees accrued subsequently charged-off, net of recoveries (recorded as a reduction to other income) $ 21 $ 23 Delinquent and Non-Accruing Loans The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent and non-accruing loans in the Company's loan portfolio is shown below for each class of loan receivables (dollars in millions): 30-89 Days 90 or Total Past 90 or Total Non-accruing (1) At March 31, 2022 Credit card loans $ 692 $ 613 $ 1,305 $ 592 $ 183 Other loans Private student loans 125 43 168 42 7 Personal loans 35 13 48 12 6 Other loans 7 9 16 2 17 Total other loans 167 65 232 56 30 Total loan receivables $ 859 $ 678 $ 1,537 $ 648 $ 213 At December 31, 2021 Credit card loans $ 670 $ 562 $ 1,232 $ 527 $ 194 Other loans Private student loans 121 36 157 35 8 Personal loans 35 13 48 12 7 Other loans 7 7 14 1 16 Total other loans 163 56 219 48 31 Total loan receivables $ 833 $ 618 $ 1,451 $ 575 $ 225 (1) The Company estimates that the gross interest income that would have been recorded under the original terms of non-accruing credit card loans was $6 million and $8 million for the three months ended March 31, 2022 and 2021, respectively. The Company does not separately track the amount of gross interest income that would have been recorded under the original terms of loans. Instead, the Company estimated this amount based on customers' current balances and most recent interest rates. The payment status of modified loans, including those identified as TDRs and those exempt from the TDR designation pursuant to the CARES Act, is reflected in the Company’s delinquency reporting. Troubled Debt Restructurings The Company has internal loan modification programs that provide relief to credit card, private student and personal loan borrowers who may be experiencing financial hardship. The Company considers a modified loan in which a concession has been granted to the borrower to be a TDR based on the cumulative length of the concession period and credit quality of the borrower. The internal loan modification programs include both temporary and permanent programs, which vary by product. External loan modification programs are also available for credit card and personal loans. The Company evaluates new programs to determine which of them meet the definition of a TDR. Temporary and permanent modifications on credit card and personal loans, as well as temporary modifications on private student loans and certain grants of private student loan forbearance, generally result in the loans being classified as TDRs. In addition, loans that defaulted from, or successfully completed a loan modification program or forbearance, continue to be classified as TDRs, except as noted in the following paragraph. See the table below that presents the carrying value of loans that entered a TDR program and experienced a default during the period for more information. For credit card customers, the Company offers both temporary and permanent hardship programs. The temporary hardship programs consist of an interest rate reduction and, in some cases, a reduced minimum payment, both lasting for a period no longer than 12 months. Charging privileges on these accounts are generally suspended while in the program. However, if the customer meets certain criteria, charging privileges may be reinstated following completion of the program. Credit card accounts of borrowers who have previously participated in a temporary interest rate reduction program and that have both demonstrated financial stability and had their charging privileges reinstated at a market-based interest rate, are excluded from the balance of TDRs. The permanent modification program involves closing the account, changing the structure of the loan to a fixed payment loan with a maturity no longer than 72 months and reducing the interest rate on the loan. The permanent modification program does not typically provide for the forgiveness of unpaid principal, but may allow for the reversal of certain unpaid interest or fee assessments. The Company also makes permanent loan modifications for customers who request financial assistance through external sources, such as a consumer credit counseling agency program. These loans typically receive a reduced interest rate, typically continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. These permanent loan modifications remain in the population of TDRs until they are paid off or charged off. At March 31, 2022 and December 31, 2021, there were $5.6 billion and $5.8 billion, respectively, of private student loans in repayment and $79 million and $64 million, respectively, in forbearance. To assist private student loan borrowers who are experiencing temporary financial difficulties but are willing to resume making payments, the Company may offer hardship forbearance, payment deferral, a temporary payment reduction, a temporary interest rate reduction or extended terms. A modified loan typically meets the definition of a TDR based on the cumulative length of the concession period and a determination of financial distress based on an evaluation of the borrower's credit quality using FICO scores. For personal loan customers, the Company offers various payment programs, including temporary and permanent programs, in certain situations. The temporary programs normally consist of reducing the minimum payment for no longer than 12 months. Further, the interest rate on the loan is reduced in certain circumstances. The permanent programs involve extending the loan term and, in certain circumstances, reducing the interest rate on the loan. The total term of the loan, including modification, may not exceed nine years. The Company also allows permanent loan modifications for customers who request financial assistance through external sources, similar to the credit card customers discussed above. Payments are modified based on the new terms agreed upon with the credit counseling agency. Personal loans included in temporary and permanent programs are classified as TDRs. The Company monitors borrower performance after using payment programs or forbearance. The Company believes the programs are useful in assisting customers experiencing financial difficulties and allowing them to make timely payments. In addition to helping customers with their credit needs, these programs are designed to maximize collections and ultimately the Company’s profitability. The Company plans to continue to use payment programs and forbearance to provide relief to customers experiencing temporary financial difficulties and expects to have additional loans classified as TDRs in the future as a result. To evaluate the primary financial effects that resulted from credit card loans entering into a TDR program during the three months ended March 31, 2022 and 2021, the Company quantified the amount by which interest and fees were reduced during the periods. During the three months ended March 31, 2022 and 2021, the Company forgave approximately $7 million and $12 million, respectively, of interest and fees resulting from accounts entering into a credit card loan TDR program. For all loan products, interest income on modified loans is recognized based on the modified contractual terms. The following table provides information on loans that entered a TDR program during the period (dollars in millions): For the Three Months Ended March 31, 2022 2021 Number of Accounts Balances Number of Accounts Balances Accounts that entered a TDR program during the period Credit card loans (1) 54,511 $ 344 20,702 $ 135 Private student loans 1,755 $ 31 126 $ 2 Personal loans 1,159 $ 15 1,390 $ 17 (1) Accounts that entered a credit card TDR program include $75 million and $128 million that were converted from revolving line-of-credit arrangements to term loans during the three months ended March 31, 2022 and 2021, respectively. The number and balance of enrollments in credit card and private student loan modification programs designated as TDRs increased during the three months ended March 31, 2022, when compared to the same period in 2021. For the three months ended March 31, 2021, enrollments in loan modification programs designated as TDRs were favorably impacted by accounting and financial reporting exemptions provided by the CARES Act, which expired on January 1, 2022. The number and balance of enrollments in personal loan modification programs designated as TDRs decreased during the three months ended March 31, 2022, when compared to the same period in 2021, primarily due to tighter underwriting standards that the Company implemented in early 2020. The decrease was partially offset by the favorable impact of the accounting and financial reporting exemptions provided by the CARES Act for the three months ended March 31, 2021. The following table presents the carrying value of loans that experienced a default during the period that had been modified in a TDR during the 15 months preceding the end of each period (dollars in millions): For the Three Months Ended March 31, 2022 2021 Number of Accounts Aggregated Outstanding Balances Upon Default Number of Accounts Aggregated Outstanding Balances Upon Default TDRs that subsequently defaulted Credit card loans (1)(2) 4,535 $ 23 6,001 $ 36 Private student loans (3) 106 $ 2 66 $ 2 Personal loans (2) 261 $ 3 527 $ 7 (1) For credit card loans that default from a temporary loan modification program, accounts revert back to the pre-modification terms and charging privileges remain suspended in most cases. (2) For credit card loans and personal loans, a customer defaults from a loan modification program after either two consecutive missed payments or at charge-off, depending on the program. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. (3) For student loans, a customer defaults from a loan modification after they are 60 or more days delinquent. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. Of the account balances that defaulted as shown above for the three months ended March 31, 2022 and 2021, approximately 64% and 68%, respectively, of the total balances were charged off at the end of the month in which they defaulted from a TDR program. For accounts that have defaulted from a TDR program and have not been subsequently charged off, the balances are included in the allowance for credit loss analysis discussed above under “— Allowance for Credit Losses.” |
Credit Card and Private Student
Credit Card and Private Student Loan Securitization Activities | 3 Months Ended |
Mar. 31, 2022 | |
Variable Interest Entities Disclosure [Abstract] | |
Credit Card and Private Student Loan Securitization Activities | Credit Card and Private Student Loan Securitization ActivitiesThe Company's securitizations are accounted for as secured borrowings and the related trusts are treated as consolidated subsidiaries of the Company. For a description of the Company's principles of consolidation with respect to VIEs, see Note 1: Background and Basis of Presentation to the consolidated financial statements in the Company's annual report on Form 10-K for the year ended December 31, 2021. Credit Card Securitization Activities The Company accesses the term asset securitization market through the Discover Card Master Trust I ("DCMT") and the Discover Card Execution Note Trust ("DCENT"). Credit card loan receivables are transferred into DCMT and beneficial interests in DCMT are transferred into DCENT. DCENT issues debt securities to investors that are reported primarily in long-term borrowings. The DCENT debt structure consists of four classes of securities (DiscoverSeries Class A, B, C and D notes), with the most senior class generally receiving a triple-A rating. To issue senior, higher-rated classes of notes, it is necessary to obtain the appropriate amount of credit enhancement, generally through the issuance of junior, lower-rated or more highly subordinated classes of notes. Wholly owned subsidiaries of Discover Bank hold the subordinated classes of notes. The Company is exposed to credit risk associated with trust receivables as of the balance sheet date through the retention of these subordinated interests. The current expected credit loss ("CECL") on trust receivables is included in the allowance for credit losses estimate. The Company's retained interests in the trust's assets, consisting of investments in DCENT notes held by subsidiaries of Discover Bank, constitute intercompany positions that are eliminated in the preparation of the Company's condensed consolidated statements of financial condition. Upon transfer of credit card loan receivables to the trust, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the trust's creditors. Further, the transferred credit card loan receivables are owned by the trust and are not available to the Company's third-party creditors. The trusts have ownership of cash balances, the amounts of which are reported in restricted cash within the Company's condensed consolidated statements of financial condition. Except for the seller's interest in trust receivables, the Company's interests in trust assets are generally subordinate to the interests of third-party investors in trust debt and, as such, may not be realized by the Company if needed to absorb deficiencies in cash flows that are allocated to those investors. Apart from the restricted assets related to securitization activities, the investors and the securitization trusts have no recourse to the Company's other assets or the Company's general credit for a shortage in cash flows. The carrying values of these restricted assets, which are presented on the Company's condensed consolidated statements of financial condition as relating to securitization activities, are shown in the following table (dollars in millions): March 31, December 31, Restricted cash $ 9 $ 2,574 Investors' interests held by third-party investors 7,625 9,425 Investors' interests held by wholly owned subsidiaries of Discover Bank 3,102 3,899 Seller's interest 13,308 11,918 Loan receivables (1) 24,035 25,242 Allowance for credit losses allocated to securitized loan receivables (1) (1,231) (1,371) Net loan receivables 22,804 23,871 Other assets 3 3 Carrying value of assets of consolidated variable interest entities $ 22,816 $ 26,448 (1) The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP. The debt securities issued by the consolidated trusts are subject to credit, payment and interest rate risks on the transferred credit card loan receivables. To protect investors in the securities, there are certain features or triggering events that will cause an early amortization of the debt securities, including triggers related to the impact of the performance of the trust receivables on the availability and adequacy of cash flows to meet contractual requirements. As of March 31, 2022, no economic or other early amortization events have occurred. The Company continues to own and service the accounts that generate the loan receivables held by the trusts. Discover Bank receives servicing fees from the trusts based on a percentage of the monthly investor principal balance outstanding. Although the fee income to Discover Bank offsets the fee expense to the trusts and thus is eliminated in consolidation, failure to service the transferred loan receivables in accordance with contractual requirements could lead to a termination of the servicing rights and the loss of future servicing income, net of related expenses. Private Student Loan Securitization Activities Private student loan trust receivables are reported in loan receivables and the related debt issued by the trust is reported in long-term borrowings. The trust assets are restricted from being sold or pledged as collateral for other borrowings and the cash flows from these restricted assets may be used only to pay obligations of the trusts. Except for the trust's restricted assets, the trust and investors have no recourse to the Company's other assets or the Company's general credit for a shortage in cash flows. Principal payments on the long-term secured borrowings are made as cash is collected on the underlying loans that are collateral on the secured borrowings. The Company does not have access to cash collected by the securitization trust until cash is released in accordance with the trust indenture agreement. Similar to the credit card securitizations, the Company continues to own and service the private student loan receivables held by the trust and receives servicing fees from the trust based on a percentage of the principal balance outstanding. Although the servicing fee income offsets the fee expense related to the trust and thus is eliminated in consolidation, failure to service the transferred loan receivables in accordance with contractual requirements could lead to a termination of the servicing rights and the loss of future servicing income, net of related expenses. Under terms of the trust arrangement, the Company has the option, but not the obligation, to provide financial support to the trust, but has never provided such support. A substantial portion of the credit risk associated with the securitized loans has been transferred to a third party under an indemnification arrangement. The carrying values of these restricted assets, which are presented on the Company's condensed consolidated statements of financial condition as relating to securitization activities, are shown in the following table (dollars in millions): March 31, December 31, Restricted cash $ 9 $ 8 Private student loan receivables 196 207 Carrying value of assets of consolidated variable interest entities $ 205 $ 215 |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2022 | |
Deposits [Abstract] | |
Deposits | Deposits The Company offers its deposit products to customers through two channels: (i) direct marketing, internet origination and affinity relationships ("direct-to-consumer deposits"); and (ii) contractual arrangements with securities brokerage firms ("brokered deposits"). Direct-to-consumer deposits include online savings accounts, certificates of deposit, money market accounts, IRA savings accounts, IRA certificates of deposit and checking/debit accounts. Brokered deposits include certificates of deposit and sweep accounts. The following table summarizes certificates of deposits maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): At March 31, 2022 2022 $ 9,586 2023 4,851 2024 1,669 2025 904 2026 864 Thereafter 789 Total $ 18,663 |
Long-Term Borrowings
Long-Term Borrowings | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Borrowings | Long-Term Borrowings Long-term borrowings consist of borrowings having original maturities of one year or more. The following table provides a summary of the Company's long-term borrowings and weighted-average interest rates on outstanding balances (dollars in millions): March 31, 2022 December 31, 2021 Maturity Interest Weighted-Average Interest Rate Outstanding Amount Outstanding Amount Securitized Debt Fixed-rate asset-backed securities (1) 2022-2026 0.58% - 3.03% 1.70% $ 5,019 $ 5,588 Floating-rate asset-backed securities (2) 2022-2024 0.73% - 1.00% 0.84% 2,598 3,347 Total Discover Card Master Trust I and Discover Card Execution Note Trust 7,617 8,935 Floating-rate asset-backed security (3)(4) 2031 4.50% 4.50% 98 104 Total private student loan securitization trust 98 104 Total long-term borrowings - owed to securitization investors 7,715 9,039 Discover Financial Services (Parent Company) Fixed-rate senior notes 2022-2027 3.75% - 5.20% 4.17% 3,394 3,382 Fixed-rate retail notes 2022-2031 2.85% - 4.40% 3.75% 166 166 Discover Bank Fixed-rate senior bank notes (1) 2023-2030 2.45% - 4.65% 3.63% 5,362 5,385 Fixed-rate subordinated bank notes (1) 2028 4.68% 4.68% 495 505 Total long-term borrowings $ 17,132 $ 18,477 (1) The Company uses interest rate swaps to hedge portions of these long-term borrowings against changes in fair value attributable to changes in the London Interbank Offered Rate ("LIBOR") or Overnight Index Swap ("OIS") rates. The use of these interest rate swaps impacts the carrying value of the debt. See Note 15: Derivatives and Hedging Activities. (2) DCENT floating-rate asset-backed securities include issuances with the following interest rate terms: 1-month LIBOR + 33 to 60 basis points as of March 31, 2022. (3) The private student loan securitization trust floating-rate asset-backed security includes an issuance with the following interest rate term: Prime rate + 100 basis points as of March 31, 2022. (4) Repayment of this debt is dependent upon the timing of principal and interest payments on the underlying private student loans. The date shown represents the final maturity date. The following table summarizes long-term borrowings maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): March 31, 2022 2022 $ 2,638 2023 3,295 2024 3,731 2025 1,775 2026 2,666 Thereafter 3,027 Total $ 17,132 As a member of the FHLB of Chicago, the Company has access to both short- and long-term advance structures with maturities ranging from overnight to 30 years. At March 31, 2022, the Company had total committed borrowing capacity of $1.5 billion based on the amount and type of assets pledged, none of which was drawn. At December 31, 2021, the Company had total committed borrowing capacity of $1.4 billion based on the amount and type of assets pledged, of which $1.3 billion of short-term advances were outstanding. Additionally, the Company has access to committed borrowing capacity through private securitizations to support the funding of its credit card loan receivables. As of March 31, 2022, the total commitment of secured credit facilities through |
Preferred Stock (Notes)
Preferred Stock (Notes) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock The table below presents a summary of the Company's non-cumulative perpetual preferred stock that is outstanding at March 31, 2022 (dollars in millions, except per depositary share amounts): Series Description Initial Issuance Date Liquidation Preference and Redemption Price per Depositary Share (1) Per Annum Dividend Rate in effect at March 31, 2022 Total Depositary Shares Authorized, Issued and Outstanding Carrying Value March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021 C (2)(3)(4) Fixed-to-Floating Rate 10/31/2017 $ 1,000 5.500 % 570,000 570,000 $ 563 $ 563 D (2)(5)(6) Fixed-Rate Reset 6/22/2020 $ 1,000 6.125 % 500,000 500,000 493 493 Total Preferred Stock 1,070,000 1,070,000 $ 1,056 $ 1,056 (1) Redeemable at the redemption price plus declared and unpaid dividends. (2) Issued as depositary shares, each representing 1/100 th interest in a share of the corresponding series of preferred stock. Each preferred share has a par value of $0.01. (3) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part on any dividend payment date on or after October 30, 2027, or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series C preferred stock). (4) Any dividends declared are payable semi-annually in arrears at a rate of 5.50% per annum until October 30, 2027. Thereafter, dividends declared will be payable quarterly in arrears at a floating rate equal to 3-month LIBOR plus a spread of 3.076% per annum. (5) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part during the three-month period prior to, and including, each reset date (as defined in the certificate of designations for the Series D preferred stock) or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series D Preferred Stock). (6) Any dividends declared are payable semi-annually in arrears at a rate of 6.125% per annum until September 23, 2025, after which the dividend rate will reset every five years to a fixed annual rate equal to the 5-year Treasury plus a spread of 5.783%. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Changes in each component of accumulated other comprehensive income ("AOCI") were as follows (dollars in millions): Unrealized Gains (Losses) on Available-for-Sale Investment Securities, Net of Tax Losses on Cash Flow Hedges, Net of Tax Losses on Pension Plan, Net of Tax AOCI For the Three Months Ended March 31, 2022 Balance at December 31, 2021 $ 114 $ (9) $ (199) $ (94) Net change (121) 2 — (119) Balance at March 31, 2022 $ (7) $ (7) $ (199) $ (213) For the Three Months Ended March 31, 2021 Balance at December 31, 2020 $ 284 $ (12) $ (227) $ 45 Net change (53) 1 — (52) Balance at March 31, 2021 $ 231 $ (11) $ (227) $ (7) The following table presents each component of other comprehensive income ("OCI") before reclassifications and amounts reclassified from AOCI for each component of OCI before- and after-tax (dollars in millions): Before Tax Tax Benefit Net of Tax For the Three Months Ended March 31, 2022 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (160) $ 39 $ (121) Net change $ (160) $ 39 $ (121) Cash Flow Hedges Net unrealized losses arising during the period $ (1) $ — $ (1) Amounts reclassified from AOCI 1 2 3 Net change $ — $ 2 $ 2 For the Three Months Ended March 31, 2021 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (71) $ 18 $ (53) Net change $ (71) $ 18 $ (53) Cash Flow Hedges Amounts reclassified from AOCI $ 1 $ — $ 1 Net change $ 1 $ — $ 1 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the calculation of the Company's effective income tax rate (dollars in millions): For the Three Months Ended March 31, 2022 2021 Income before income taxes $ 1,618 $ 2,079 Income tax expense $ 376 $ 486 Effective income tax rate 23.3 % 23.4 % Income tax expense decreased $110 million for the three months ended March 31, 2022, as compared to the same period in 2021 due to a decrease in pretax income. The effective tax rate was relatively flat for the three months ended March 31, 2022 as compared to the same period in 2021. The Company is subject to examination by the Internal Revenue Service ("IRS") and tax authorities in various state, local and foreign tax jurisdictions. The IRS is examining the Company's 2018 federal income tax filings. The Company regularly assesses the likelihood of additional assessments or settlements in each of the taxing jurisdictions. At this time, the potential change in unrecognized tax benefits is expected to be immaterial over the next 12 months. The Company believes that its reserves are sufficient to cover any tax, penalties and interest that would result from such examinations. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents the calculation of basic and diluted earnings per share ("EPS") (dollars and shares in millions, except per share amounts): For the Three Months Ended March 31, 2022 2021 Numerator Net income $ 1,242 $ 1,593 Preferred stock dividends (31) (39) Net income available to common stockholders 1,211 1,554 Income allocated to participating securities (6) (8) Net income allocated to common stockholders $ 1,205 $ 1,546 Denominator Weighted-average shares of common stock outstanding 285 307 Weighted-average shares of common stock outstanding and common stock equivalents 285 307 Basic earnings per common share $ 4.23 $ 5.04 Diluted earnings per common share $ 4.22 $ 5.04 Anti-dilutive securities were not material and had no impact on the computation of diluted EPS for the three months ended March 31, 2022 and 2021. |
Capital Adequacy
Capital Adequacy | 3 Months Ended |
Mar. 31, 2022 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Capital Adequacy | Capital Adequacy DFS is subject to the capital adequacy guidelines of the Federal Reserve. Discover Bank, the Company's banking subsidiary, is subject to various regulatory capital requirements as administered by the Federal Deposit Insurance Corporation ("FDIC"). Failure to meet minimum capital requirements can result in the initiation of certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could limit the Company's business activities and have a direct material effect on the financial condition and operating results of DFS and Discover Bank. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, DFS and Discover Bank must meet specific risk-based capital requirements and leverage ratios that involve quantitative measures of assets, liabilities and certain off-balance sheet items, as calculated under regulatory guidelines. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. DFS and Discover Bank are subject to regulatory and capital rules issued by the Federal Reserve and FDIC, respectively, under the Basel Committee's December 2010 framework ("Basel III rules"). Under the Basel III rules, DFS and Discover Bank are classified as "standardized approach" entities. Standardized approach entities are defined as U.S. banking organizations with consolidated total assets over $50 billion but not exceeding $250 billion and consolidated total on-balance sheet foreign exposure less than $10 billion. On March 27, 2020, federal bank regulatory agencies announced an interim and now final rule that allows banks that have implemented the CECL accounting model to delay the estimated impact of CECL on regulatory capital for two years, followed by a three-year transition period. For purposes of calculating regulatory capital, the Company has elected to defer recognition of the estimated impact of CECL on regulatory capital for two years in accordance with the final rule; after that period of deferral, which ended December 31, 2021, the estimated impact of CECL on regulatory capital will be phased in over three years beginning in 2022. Accordingly, the Company's Common Equity Tier 1 ("CET1") capital ratios in 2020, 2021 and 2022 are higher than they otherwise would have been. The Company's CET1 capital ratios will continue to be favorably impacted by this election over the phase-in period. As of March 31, 2022 and December 31, 2021, DFS and Discover Bank met all Basel III minimum capital ratio requirements to which they were subject. DFS and Discover Bank also met the requirements to be considered "well-capitalized" under Regulation Y and prompt corrective action rules, respectively. There have been no conditions or events that management believes have changed DFS' or Discover Bank's category. To be categorized as "well-capitalized", DFS and Discover Bank must maintain minimum capital ratios outlined in the table below. The following table shows the actual capital amounts and ratios of DFS and Discover Bank and comparisons of each to the regulatory minimum and "well-capitalized" requirements (dollars in millions): Actual Minimum Capital Capital Requirements Amount Ratio (1) Amount Ratio Amount (2) Ratio (2) March 31, 2022 Total capital (to risk-weighted assets) Discover Financial Services $ 16,724 17.6 % $ 7,585 ≥8.0% $ 9,481 ≥10.0% Discover Bank $ 15,647 16.7 % $ 7,475 ≥8.0% $ 9,344 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services $ 15,002 15.8 % $ 5,689 ≥6.0% $ 5,689 ≥6.0% Discover Bank $ 13,741 14.7 % $ 5,607 ≥6.0% $ 7,475 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services $ 15,002 13.7 % $ 4,367 ≥4.0% N/A N/A Discover Bank $ 13,741 12.8 % $ 4,309 ≥4.0% $ 5,386 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services $ 13,946 14.7 % $ 4,266 ≥4.5% N/A N/A Discover Bank $ 13,741 14.7 % $ 4,205 ≥4.5% $ 6,074 ≥6.5% December 31, 2021 Total capital (to risk-weighted assets) Discover Financial Services $ 17,150 17.6 % $ 7,775 ≥8.0% $ 9,719 ≥10.0% Discover Bank $ 15,957 16.9 % $ 7,573 ≥8.0% $ 9,466 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services $ 15,395 15.8 % $ 5,831 ≥6.0% $ 5,831 ≥6.0% Discover Bank $ 13,932 14.7 % $ 5,680 ≥6.0% $ 7,573 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services $ 15,395 13.9 % $ 4,432 ≥4.0% N/A N/A Discover Bank $ 13,932 12.8 % $ 4,365 ≥4.0% $ 5,456 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services $ 14,339 14.8 % $ 4,373 ≥4.5% N/A N/A Discover Bank $ 13,932 14.7 % $ 4,260 ≥4.5% $ 6,153 ≥6.5% (1) Capital ratios are calculated based on the Basel III standardized approach rules, subject to applicable transition provisions, including CECL transition provisions. (2) The Basel III rules do not establish well-capitalized thresholds for these measures for bank holding companies. Existing well-capitalized thresholds established in the Federal Reserve's Regulation Y have been included where available. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2022 | |
Commitments Contingencies and Guarantees [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees In the normal course of business, the Company enters into a number of off-balance sheet commitments, transactions and obligations under guarantee arrangements that expose the Company to varying degrees of risk. The Company's commitments, contingencies and guarantee relationships are described below. Commitments Unused Credit Arrangements At March 31, 2022, the Company had unused credit arrangements for loans of approximately $222.3 billion. Such arrangements arise primarily from agreements with customers for unused lines of credit on certain credit cards and certain other loan products, provided there is no violation of conditions in the related agreements. These arrangements, substantially all of which the Company can terminate at any time and which do not necessarily represent future cash requirements, are periodically reviewed based on account usage, customer creditworthiness and loan qualification. As the Company’s credit card loans are unconditionally cancellable, no liability for expected credit losses is required for unused lines of credit. For all other loans, the Company records a liability for expected credit losses for unfunded commitments, which is presented as part of accrued expenses and other liabilities in the consolidated statements of financial condition. Contingencies See Note 13: Litigation and Regulatory Matters for a description of potential liability arising from pending litigation or regulatory proceedings involving the Company. Guarantees The Company has obligations under certain guarantee arrangements, including contracts, indemnification agreements and representations and warranties, which contingently require the Company to make payments to the guaranteed party based on changes in an underlying asset, liability or equity security of a guaranteed party, rate or index. Also included as guarantees are contracts that contingently require the Company to make payments to a guaranteed party based on another entity's failure to perform under an agreement. The Company's use of guarantees is disclosed below by type of guarantee. Securitizations Representations and Warranties As part of the Company's financing activities, the Company provides representations and warranties that certain assets pledged as collateral in secured borrowing arrangements conform to specified guidelines. Due diligence is performed by the Company, which is intended to ensure that asset guideline qualifications are met. If the assets pledged as collateral do not meet certain conforming guidelines, the Company may be required to replace, repurchase or sell such assets. In its credit card securitization activities, the Company would replace nonconforming receivables through the allocation of excess seller's interest or from additional transfers from the unrestricted pool of receivables. If the Company could not add enough receivables to satisfy the requirement, an early amortization (or repayment) of investors' interests would be triggered. In its student loan securitizations, the Company would generally repurchase the loans from the trust at the outstanding principal amount plus interest. The maximum potential amount of future payments the Company could be required to make would be equal to the current outstanding balances of third-party investor interests in credit card asset-backed securities and the principal amount of any private student loan secured borrowings, plus any unpaid interest for the corresponding secured borrowings. The Company has recorded substantially all of the maximum potential amount of future payments in long-term borrowings on the Company's condensed consolidated statements of financial condition. The Company has not recorded any incremental contingent liability associated with its secured borrowing representations and warranties. Management believes that the probability of having to replace, repurchase or sell assets pledged as collateral under secured borrowing arrangements, including an early amortization event, is low. Counterparty Settlement Guarantees Diners Club and DFS Services LLC (on behalf of PULSE) have various counterparty exposures, which are listed below: • Merchant Guarantee . Diners Club has entered into contractual relationships with certain international merchants, which generally include travel-related businesses, for the benefit of all Diners Club licensees. The licensees hold the primary liability to settle the transactions of their customers with these merchants. However, Diners Club retains a counterparty exposure if a licensee fails to meet its financial payment obligation to one of these merchants. • ATM Guarantee. PULSE entered into contractual relationships with certain international ATM acquirers in which DFS Services LLC retains counterparty exposure if an issuer fails to fulfill its settlement obligation. • Global Network Alliance Guarantee . Discover Network, Diners Club and PULSE have entered into contractual relationships with certain international payment networks in which DFS Services LLC retains the counterparty exposure if a network fails to fulfill its settlement obligation. The maximum potential amount of future payments related to such contingent obligations is dependent upon the transaction volume processed between the time a potential counterparty defaults on its settlement and the time at which the Company disables the settlement of any further transactions for the defaulting party. The Company has some contractual remedies to offset these counterparty settlement exposures (such as letters of credit or pledged deposits), however, there is no limitation on the maximum amount the Company may be liable to pay. The actual amount of the potential exposure cannot be quantified as the Company cannot determine whether particular counterparties will fail to meet their settlement obligations. In the event all licensees and/or issuers were to become unable to settle their transactions, the Company estimates its maximum potential counterparty exposures to these settlement guarantees would be approximately $90 million as of March 31, 2022. The Company believes that the estimated amounts of maximum potential future payments are not representative of the Company's actual potential loss exposure given Diners Club's and PULSE's insignificant historical losses from these counterparty exposures. As of March 31, 2022, the Company had not recorded any contingent liability in the condensed consolidated financial statements for these counterparty exposures and management believes that the probability of any payments under these arrangements is low. Discover Network Merchant Chargeback Guarantees The Company operates the Discover Network, issues payment cards and permits third parties to issue payment cards. The Company is contingently liable for certain transactions processed on the Discover Network in the event of a dispute between the payment card customer and a merchant. The contingent liability arises if the disputed transaction involves a merchant or merchant acquirer with whom the Discover Network has a direct relationship. If a dispute is resolved in the customer's favor, the Discover Network will credit or refund the disputed amount to the Discover Network card issuer, who in turn credits its customer's account. The Discover Network will then charge back the disputed amount of the payment card transaction to the merchant or merchant acquirer, where permitted by the applicable agreement, to seek recovery of amounts already paid to the merchant for payment card transactions. If the Discover Network is unable to collect the amount subject to dispute from the merchant or merchant acquirer (e.g., in the event of merchant default or dissolution or after expiration of the time period for chargebacks in the applicable agreement), the Discover Network will bear the loss for the amount credited or refunded to the customer. In most instances, a loss by the Discover Network is unlikely to arise in connection with payments on card transactions because most products or services are delivered when purchased and credits are issued by merchants on returned items in a timely fashion, thus minimizing the likelihood of cardholder disputes with respect to amounts paid by the Discover Network. However, where the product or service is not scheduled to be provided to the customer until a later date following the purchase, the likelihood of a contingent payment obligation by the Discover Network increases. Losses related to merchant chargebacks were not material for the three months ended March 31, 2022 and 2021. The maximum potential amount of obligations of the Discover Network arising from such contingent obligations is estimated to be the portion of the total Discover Network transaction volume processed to date for which timely and valid disputes may be raised under applicable law and relevant issuer and customer agreements. There is no limitation on the maximum amount the Company may be liable to pay to issuers. However, the Company believes that such amount is not representative of the Company's actual potential loss exposure based on the Company's historical experience. The actual amount of the potential exposure cannot be quantified as the Company cannot determine whether the current or cumulative transaction volumes may include or result in disputed transactions. The following table summarizes certain information regarding merchant chargeback guarantees (dollars in millions): For the Three Months Ended March 31, 2022 2021 Aggregate sales transaction volume (1) $ 57,153 $ 47,487 (1) Represents transactions processed on the Discover Network for which a potential liability exists that, in aggregate, can differ from credit card sales volume. The Company did not record any contingent liability in the condensed consolidated financial statements for merchant chargeback guarantees as of March 31, 2022 and December 31, 2021. The Company mitigates the risk of potential loss exposure by withholding settlement from merchants, obtaining third-party guarantees, or obtaining escrow deposits or letters of credit from certain merchant acquirers or merchants that are considered a higher risk due to various factors such as time delays in the delivery of products or services. As of March 31, 2022 and December 31, 2021, the Company had escrow deposits and settlement withholdings of $10 million and $15 million, respectively, which are recorded in interest-bearing deposit accounts and accrued expenses and other liabilities on the Company's condensed consolidated statements of financial condition. |
Litigation and Regulatory Matte
Litigation and Regulatory Matters | 3 Months Ended |
Mar. 31, 2022 | |
Loss Contingency [Abstract] | |
Litigation and Regulatory Matters | Litigation and Regulatory Matters In the normal course of business, from time to time, the Company has been named as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with its activities. Certain of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. The litigation process is not predictable and can lead to unexpected results. The Company contests liability and/or the amount of damages as appropriate in each pending matter. The Company has historically offered its customers an arbitration clause in its customer agreements. The arbitration clause allows the Company and its customers to quickly and economically resolve disputes. Additionally, the arbitration clause has in some instances limited the costs of, and the Company's exposure to, litigation. Future legal and regulatory challenges and prohibitions may cause the Company to discontinue its offering and use of such clauses. From time to time, the Company is involved in legal actions challenging its arbitration clause. Bills may be periodically introduced in Congress to directly or indirectly prohibit the use of pre-dispute arbitration clauses. The Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding the Company's business including, among other matters, consumer regulatory, accounting, tax and other operational matters. The investigations and proceedings may result in significant adverse judgments, settlements, fines, penalties, injunctions, decreases in regulatory ratings, customer restitution or other relief. These outcomes could materially impact the Company's condensed consolidated financial statements, increase its cost of operations, or limit the Company's ability to execute its business strategies and engage in certain business activities. Certain subsidiaries of the Company are subject to a consent order with the Consumer Financial Protection Bureau ("CFPB") regarding certain private student loan servicing practices, as described below. Pursuant to powers granted under federal banking laws, regulatory agencies have broad and sweeping discretion and may assess civil money penalties, require changes to certain business practices or require customer restitution at any time. In accordance with applicable accounting guidance, the Company establishes an accrued liability for legal and regulatory matters when those matters present loss contingencies that are both probable and estimable. Litigation and regulatory settlement-related expenses were immaterial for the three months ended March 31, 2022 and 2021. There may be an exposure to loss in excess of any amounts accrued. The Company believes the estimate of the aggregate range of reasonably possible losses (meaning the likelihood of losses is more than remote but less than likely), in excess of the amounts that the Company has accrued for legal and regulatory proceedings, is up to $190 million as of March 31, 2022. This estimated range of reasonably possible losses is based on currently available information for those proceedings in which the Company is involved and considers the Company's best estimate of such losses for those matters for which an estimate can be made. It does not represent the Company's maximum potential loss exposure. Various aspects of the legal proceedings underlying the estimated range will change from time to time and actual results may vary significantly from the estimate. The Company's estimated range noted above involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years and, in some cases, a wide range of business activities), unspecified damages and/or the novelty of the legal issues presented. The outcome of pending matters could adversely affect the Company's reputation and be material to the Company's condensed consolidated financial condition, operating results and cash flows for a particular future period, depending on, among other things, the level of the Company's income for such period. In July 2015, the Company announced that its subsidiaries, Discover Bank, The Student Loan Corporation and Discover Products Inc. (the "Discover Subsidiaries"), agreed to a consent order with the CFPB with respect to certain private student loan servicing practices (the “2015 Order”). The 2015 Order expired in July 2020. On December 22, 2020, the Discover Subsidiaries agreed to a consent order (the “2020 Order”) with the CFPB resolving the agency’s investigation into Discover Bank’s compliance with the 2015 Order. In connection with the 2020 Order, Discover is required to implement a redress and compliance plan and must pay at least $10 million in consumer redress to consumers who may have been harmed and paid a $25 million civil money penalty to the CFPB. On March 8, 2016, a class-action lawsuit was filed against the Company, other credit card networks, other issuing banks and EMVCo in the U.S. District Court for the Northern District of California (B&R Supermarket, Inc., d/b/a Milam's Market, et al. v. Visa, Inc. et al.) alleging a conspiracy by defendants to shift fraud liability to merchants with the migration to the EMV security standard and chip technology. The plaintiffs assert joint and several liability among the defendants and seek unspecified damages, including treble damages, attorneys' fees, costs and injunctive relief. In May 2017, the Court entered an order transferring the entire action to a federal court in New York that is presiding over certain related claims that are pending in the actions consolidated as MDL 1720. On August 28, 2020, the Court granted the plaintiffs' Motion to Certify a Class. The defendants appealed the ruling, which was denied on January 20, 2021. The Company filed a Motion to Compel Arbitration, on which briefing closed in March 2021. On September 27, 2021, the court ruled the motion was premature and |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement , provides a three-level hierarchy for classifying the inputs to valuation techniques used to measure fair value of financial instruments based on whether the inputs are observable or unobservable. It also requires certain disclosures about those measurements. The three-level valuation hierarchy is as follows: • Level 1 : Fair values determined by Level 1 inputs are defined as those that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. • Level 2 : Fair values determined by Level 2 inputs are those that utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active or inactive markets, quoted prices for the identical assets in an inactive market and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. The Company evaluates factors such as the frequency of transactions, the size of the bid-ask spread and the significance of adjustments made when considering transactions involving similar assets or liabilities to assess the relevance of those observed prices. If relevant and observable prices are available, the fair values of the related assets or liabilities would be classified as Level 2. • Level 3 : Fair values determined by Level 3 inputs are those based on unobservable inputs and include situations where there is little, if any, market activity for the asset or liability being valued. In instances where the inputs used to measure fair value may fall into different levels of the fair value hierarchy, the level in the fair value hierarchy in which the measurements classified based on the lowest level input that is significant to the fair value measurement in its entirety. Accordingly, the Company may utilize both observable and unobservable inputs in determining the fair values of financial instruments classified within the Level 3 category. The Company evaluates the classification of each fair value measurement within the hierarchy at least quarterly. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and involves consideration of factors specific to the asset or liability. Furthermore, certain techniques used to measure fair value involve some degree of judgment and, as a result, are not necessarily indicative of the amounts the Company would realize in a current market exchange. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are as follows (dollars in millions): Quoted Price Significant Significant Total Balance at March 31, 2022 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 5,604 $ 8 $ — $ 5,612 Residential mortgage-backed securities - Agency — 160 — 160 Available-for-sale investment securities $ 5,604 $ 168 $ — $ 5,772 Fair value - Net income Marketable equity securities $ 272 $ — $ — $ 272 Balance at December 31, 2021 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 6,505 $ 9 $ — $ 6,514 Residential mortgage-backed securities - Agency — 186 — 186 Available-for-sale investment securities $ 6,505 $ 195 $ — $ 6,700 Fair value - Net income Marketable equity securities $ 461 $ — $ — $ 461 . Available-for-Sale Investment Securities Investment securities classified as available-for-sale consist of U.S. Treasury and U.S. GSE securities and RMBS. The fair value estimates of investment securities classified as Level 1, consisting of U.S. Treasury securities, are determined based on quoted market prices for the same securities. The fair value estimates of U.S. GSE securities and RMBS are classified as Level 2 and are valued by maximizing the use of relevant observable inputs, including quoted prices for similar securities, benchmark yield curves and market-corroborated inputs. The Company validates the fair value estimates provided by pricing services primarily by comparing to valuations obtained through other pricing sources. The Company evaluates pricing variances among different pricing sources to ensure that the valuations utilized are reasonable. The Company also corroborates the reasonableness of the fair value estimates with analysis of trends of significant inputs, such as market interest rate curves. The Company further performs due diligence in understanding the procedures and techniques performed by the pricing services to derive fair value estimates. At March 31, 2022, amounts reported in RMBS reflect U.S. government agency and U.S. GSE obligations issued by Ginnie Mae, Fannie Mae and Freddie Mac with an aggregate par value of $160 million, a weighted-average coupon of 3.24% and a weighted-average remaining maturity of two years. Marketable Equity Securities The Company holds non-controlling equity positions in payment service entities that have actively traded stock and therefore have readily determinable fair values. The Company classifies these equity securities as Level 1, the fair value estimates of which are determined based on quoted share prices for the same securities. Derivative Financial Instruments The Company's derivative financial instruments consist of interest rate swaps and foreign exchange forward contracts. These instruments are classified as Level 2 as their fair values are estimated using proprietary pricing models, containing certain assumptions based on readily observable market-based inputs, including interest rate curves, option volatility and foreign currency forward and spot rates. In determining fair values, the pricing models use widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity and the observable market-based inputs. The fair values of the interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments are based on an expectation of future interest rates derived from the observable market interest rate curves. The Company considers collateral and master netting agreements that mitigate credit exposure to counterparties in determining the counterparty credit risk valuation adjustment. The fair values of the currency instruments are valued by comparing the contracted forward exchange rate pertaining to the specific contract maturities to the current market exchange rate. The Company validates the fair value estimates of interest rate swaps primarily through comparison to the fair value estimates computed by the counterparties to each of the derivative transactions. The Company evaluates pricing variances among different pricing sources to ensure that the valuations utilized are reasonable. The Company also corroborates the reasonableness of the fair value estimates with analysis of trends of significant inputs, such as market interest rate curves. The Company performs due diligence in understanding the impact of any changes to the valuation techniques performed by proprietary pricing models before implementation, working closely with the third-party valuation service and reviewing the service's control objectives at least annually. The Company corroborates the fair value of foreign exchange forward contracts through independent calculation of the fair value estimates. As of October 16, 2020, the Company revised its valuation methodology to reflect changes made by central clearinghouses that changed the discounting methodology and interest calculation of cash variation margin from Federal Funds OIS to the SOFR OIS for U.S. Dollar cleared interest rate swaps. The Company's valuation methodology will result in valuations for cleared interest rate swaps that better reflect cleared swap prices obtainable in the markets in which the Company transacts. Pursuant to ASC Topic 848, the Company has elected and applied certain optional expedients and exceptions that provide contract modification and hedge accounting relief to eligible interest rate swaps affected by the change in the discounting methodology. The changes in valuation methodology are applied prospectively as a change in accounting estimate and are immaterial to the Company’s financial statements. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis The Company also has assets that, under certain conditions, are subject to measurement at fair value on a non-recurring basis. These assets include those associated with acquired businesses, including goodwill. For these assets, measurement at fair value in periods subsequent to the initial recognition of the assets may be applicable whenever one is tested for impairment. No impairments were recognized related to these assets during the three months ended March 31, 2022 and 2021. Financial Instruments Measured at Other Than Fair Value The following tables disclose the estimated fair value of the Company's financial assets and financial liabilities that are not required to be carried at fair value (dollars in millions): Balance at March 31, 2022 Quoted Prices in Active Markets Significant Significant Total Carrying Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 198 $ — $ 198 $ 205 Held-to-maturity investment securities $ — $ 198 $ — $ 198 $ 205 Net loan receivables $ — $ — $ 93,725 $ 93,725 $ 86,824 Carrying value approximates fair value (1) Cash and cash equivalents $ 9,625 $ — $ — $ 9,625 $ 9,625 Restricted cash $ 18 $ — $ — $ 18 $ 18 Accrued interest receivables (2) $ — $ 956 $ — $ 956 $ 956 Liabilities Amortized cost Time deposits (3) $ — $ 18,843 $ — $ 18,843 $ 18,663 Long-term borrowings - owed to securitization investors $ — $ 7,511 $ 98 $ 7,609 $ 7,715 Other long-term borrowings — 9,521 — 9,521 9,417 Long-term borrowings $ — $ 17,032 $ 98 $ 17,130 $ 17,132 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 108 $ — $ 108 $ 108 Balance at December 31, 2021 Quoted Prices in Active Markets Significant Significant Total Carrying Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 206 $ — $ 206 $ 204 Held-to-maturity investment securities $ — $ 206 $ — $ 206 $ 204 Net loan receivables $ — $ — $ 94,176 $ 94,176 $ 86,862 Carrying value approximates fair value (1) Cash and cash equivalents $ 8,750 $ — $ — $ 8,750 $ 8,750 Restricted cash $ 2,582 $ — $ — $ 2,582 $ 2,582 Accrued interest receivables (2) $ — $ 948 $ — $ 948 $ 948 Liabilities Amortized cost Time deposits (3) $ — $ 21,490 $ — $ 21,490 $ 21,125 Short-term borrowings $ — $ 1,750 $ — $ 1,750 $ 1,750 Long-term borrowings - owed to securitization investors $ — $ 8,953 $ 104 $ 9,057 $ 9,039 Other long-term borrowings — 10,013 — 10,013 9,438 Long-term borrowings $ — $ 18,966 $ 104 $ 19,070 $ 18,477 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 184 $ — $ 184 $ 184 (1) The carrying values of these assets and liabilities approximate fair value due to their short-term nature. (2) Accrued interest receivable and payable carrying values are presented as part of other assets or accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. (3) Excludes deposits without contractually defined maturities for all periods presented. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company uses derivatives to manage its exposure to various financial risks. The Company does not enter into derivatives for trading or speculative purposes. Certain derivatives used to manage the Company's exposure to foreign currency are not designated as hedges and do not qualify for hedge accounting. Derivatives may give rise to counterparty credit risk, which generally is mitigated through collateral arrangements as described under the sub-heading "— Collateral Requirements and Credit-Risk Related Contingency Features." The Company enters into derivative transactions with established dealers that meet minimum credit criteria established by the Company. All counterparties must be pre-approved before engaging in any transaction with the Company. The Company regularly monitors counterparties to ensure compliance with the Company's risk policies and limits. In determining the counterparty credit risk valuation adjustment for the fair values of derivatives, if any, the Company considers collateral and legally enforceable master netting agreements that mitigate credit exposure to related counterparties. All derivatives are recorded in other assets at their gross positive fair values and in accrued expenses and other liabilities at their gross negative fair values. See Note 14: Fair Value Measurements for a description of the valuation methodologies used for derivatives. Cash collateral amounts associated with derivative positions that are cleared through an exchange are legally characterized as settlement of the derivative positions. Such collateral amounts are reflected as offsets to the associated derivatives balances recorded in other assets or in accrued expenses and other liabilities. Other cash collateral posted and held balances are recorded in other assets and deposits, respectively, in the condensed consolidated statements of financial condition. Collateral amounts recorded in the condensed consolidated statements of financial condition are based on the net collateral posted or held position for each applicable legal entity's master netting arrangement with each counterparty. Derivatives Designated as Hedges Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows arising from changes in interest rates, or other types of forecasted transactions, are considered cash flow hedges. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Cash Flow Hedges The Company uses interest rate swaps to manage its exposure to variability in cash flows related to changes in interest rates on interest-earning assets and funding instruments. These interest rate swaps qualify for hedge accounting in accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"). At March 31, 2022 and December 31, 2021, the Company's outstanding cash flow hedges related only to interest receipts from credit card receivables and had an initial maximum period of two years. The change in the fair value of derivatives designated as cash flow hedges is recorded in OCI and is subsequently reclassified into earnings in the period that the hedged forecasted cash flows affect earnings. Amounts reported in AOCI related to derivatives at March 31, 2022, will be reclassified to interest income as interest receipts are accrued on the Company's then outstanding credit card receivables. During the next 12 months, the Company estimates it will reclassify $5 million of pretax earnings primarily related to one terminated derivative formerly designated as a cash flow hedge. Fair Value Hedges The Company is exposed to changes in the fair value of its fixed-rate debt obligations due to changes in interest rates. At March 31, 2022 and December 31, 2021, the Company used interest rate swaps to manage its exposure to changes in fair value of certain fixed-rate long-term borrowings, including securitized debt and bank notes, attributable to changes in the Federal Funds OIS rate, which is a benchmark interest rate defined by ASC 815. At December 31, 2021, the Company also used an interest rate swap to manage its exposure to changes in fair value of certain securitized debt attributable to changes in the 1-month LIBOR rate, which is a benchmark interest rate defined by ASC 815. These interest rate swaps qualify as fair value hedges in accordance with ASC 815. Changes in the fair values of both (i) the derivatives and (ii) the hedged long-term borrowings attributable to the interest-rate risk being hedged are recorded in interest expense. The changes generally provide substantial offset to one another, with any difference recognized in interest expense. Derivatives Not Designated as Hedges Foreign Exchange Forward Contracts The Company has foreign exchange forward contracts that are economic hedges and are not designated as accounting hedges. The Company enters into foreign exchange forward contracts to manage foreign currency risk. Changes in the fair value of these contracts are recorded in other income on the condensed consolidated statements of income. Derivatives Cleared Through an Exchange Cash variation margin payments on derivatives cleared through an exchange are legally considered settlement payments and are accounted for with corresponding derivative positions as one unit of account and not presented separately as collateral. With settlement payments on derivative positions cleared through this exchange reflected as offsets to the associated derivative asset and liability balances, the fair values of derivative instruments and collateral balances shown are generally reduced. Derivatives Activity The following table summarizes the fair value (including accrued interest) and outstanding notional amounts of derivative instruments and related collateral balances (dollars in millions): March 31, 2022 December 31, 2021 Notional Number of Outstanding Derivative Contracts Derivative Assets (1) Derivative Liabilities (1) Notional Derivative Assets (1) Derivative Liabilities (1) Derivatives designated as hedges Interest rate swaps—cash flow hedge $ 250 1 $ — $ — $ 250 $ — $ — Interest rate swaps—fair value hedge $ 3,425 4 — — $ 6,125 — — Derivatives not designated as hedges Foreign exchange forward contracts (2) $ 30 7 — — $ 36 — — Total gross derivative assets/liabilities (3) — — — — Less: collateral held/posted (4) — — — — Total net derivative assets/liabilities $ — $ — $ — $ — (1) The gross and net derivative assets and liabilities were immaterial as of March 31, 2022 and December 31, 2021. (2) The foreign exchange forward contracts have notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 6 million as of March 31, 2022, and notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 14 million as of December 31, 2021. (3) In addition to the derivatives disclosed in the table, the Company enters into forward contracts to purchase when-issued mortgage-backed securities as part of its community reinvestment initiatives. At March 31, 2022 and December 31, 2021, the Company had one outstanding contract with a total notional amount of $36 million and $50 million, respectively, and immaterial fair values. (4) Collateral amounts, which consist of cash and investment securities, are limited to the related derivative asset/liability balance and do not include excess collateral received/pledged. The following amounts were recorded on the statements of financial condition related to cumulative basis adjustments for fair value hedges (dollars in millions): March 31, 2022 December 31, 2021 Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Increasing the Carrying Amount of Hedged Liabilities (1) Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Increasing the Carrying Amount of Hedged Liabilities (1) Long-term borrowings $ 3,427 $ 31 $ 6,158 $ 83 (1) The balance includes $43 million and $48 million of cumulative hedging adjustments related to discontinued hedging relationships as of March 31, 2022 and December 31, 2021, respectively. The following table summarizes the impact of the derivative instruments on income and indicates where within the condensed consolidated financial statements such impact is reported (dollars in millions): Location and Amount of (Losses) Gains Recognized on the Condensed Consolidated Statements of Income Interest Expense Long-Term Borrowings For the Three Months Ended March 31, 2022 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (117) The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (1) Gains on fair value hedging relationships Gains on hedged items $ 47 Losses on interest rate swaps (32) Total gains on fair value hedging relationships $ 15 For the Three Months Ended March 31, 2021 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (123) The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (1) Gains on fair value hedging relationships Gains on hedged items $ 78 Losses on interest rate swaps (30) Total gains on fair value hedging relationships $ 48 For the impact of the derivative instruments on OCI, see Note 8: Accumulated Other Comprehensive Income. Collateral Requirements and Credit-Risk Related Contingency Features The Company has master netting arrangements and minimum collateral posting thresholds with its counterparties for its fair value and cash flow hedge interest rate swaps and foreign exchange forward contracts. The Company has not sought a legal opinion in relation to the enforceability of its master netting arrangements and, as such, does not report any of these positions on a net basis. Collateral is required by either the Company or its subsidiaries or the counterparty depending on the net fair value position of the derivatives held with that counterparty. These collateral receivable or payable amounts are generally not offset against the fair value of these derivatives but are recorded separately in other assets or deposits. Most of the Company's cash collateral amounts relate to positions cleared through an exchange and are reflected as offsets to the associated derivatives balances recorded in other assets and accrued expenses and other liabilities. The Company also has agreements with certain of its derivative counterparties that contain a provision under which the Company could be declared in default on any of its derivative obligations if the Company defaults on any of its indebtedness, including default where the lender has not accelerated repayment of the indebtedness. |
Segment Disclosures
Segment Disclosures | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Disclosures | Segment Disclosures The Company manages its business activities in two segments: Digital Banking and Payment Services. • Digital Banking: The Digital Banking segment includes Discover-branded credit cards issued to individuals on the Discover Network and other consumer products and services, including private student loans, personal loans, home loans and other consumer lending and deposit products. The majority of Digital Banking revenues relate to interest income earned on the segment's loan products. Additionally, the Company's credit card products generate substantially all revenues related to discount and interchange, protection products and loan fee income. • Payment Services: The Payment Services segment includes PULSE, an automated teller machine, debit and electronic funds transfer network; Diners Club, a global payments network; and the Company's Network Partners business, which provides payment transaction processing and settlement services on the Discover Network. The majority of Payment Services revenues relate to transaction processing revenue from PULSE and royalty and licensee revenue from Diners Club. The business segment reporting provided to and used by the Company's chief operating decision-maker is prepared using the following principles and allocation conventions: • The Company aggregates operating segments when determining reportable segments. • Corporate overhead is not allocated between segments; all corporate overhead is included in the Digital Banking segment. • Through its operation of the Discover Network, the Digital Banking segment incurs fixed marketing, servicing and infrastructure costs that are not specifically allocated among the segments, except for an allocation of direct and incremental costs driven by the Company's Payment Services segment. • The Company's assets are not allocated among the operating segments in the information reviewed by the Company's chief operating decision-maker. • The revenues of each segment are derived from external sources. The segments do not earn revenue from intercompany sources. • Income taxes are not specifically allocated between the operating segments in the information reviewed by the Company's chief operating decision-maker. The following table presents segment data (dollars in millions): Digital Payment Total For the Three Months Ended March 31, 2022 Interest income Credit card loans $ 2,268 $ — $ 2,268 Private student loans 190 — 190 Personal loans 206 — 206 Other loans 32 — 32 Other interest income 40 — 40 Total interest income 2,736 — 2,736 Interest expense 257 — 257 Net interest income 2,479 — 2,479 Provision for credit losses 154 — 154 Other income (loss) 486 (63) 423 Other expense 1,092 38 1,130 Income (loss) before income tax expense $ 1,719 $ (101) $ 1,618 For the Three Months Ended March 31, 2021 Interest income Credit card loans $ 2,154 $ — $ 2,154 Private student loans 185 — 185 Personal loans 224 — 224 Other loans 28 — 28 Other interest income 55 — 55 Total interest income 2,646 — 2,646 Interest expense 316 — 316 Net interest income 2,330 — 2,330 Provision for credit losses (365) — (365) Other income 379 86 465 Other expense 1,047 34 1,081 Income before income tax expense $ 2,027 $ 52 $ 2,079 |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), generally applies to the sales of any good or service for which no other specific accounting guidance is provided. ASC 606 defines a principles-based model under which revenue from a contract is allocated to the distinct performance obligations within the contract and recognized in income as each performance obligation is satisfied. The Company's revenue that is subject to this model includes discount and interchange, protection products fees, transaction processing revenue and certain amounts classified as other income. The following table presents revenue from contracts with customers disaggregated by business segment and reconciles revenue from contracts with customers to total other income (dollars in millions): Digital Banking Payment Services Total For the Three Months Ended March 31, 2022 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 298 $ 22 $ 320 Protection products revenue 44 — 44 Transaction processing revenue — 57 57 Other income 3 21 24 Total other income subject to ASC 606 (2) 345 100 445 Other income not subject to ASC 606 Loan fee income 140 — 140 Unrealized gains (losses) on equity investments — (188) (188) Realized gains on equity investments 1 25 26 Total other income (loss) not subject to ASC 606 141 (163) (22) Total other income (loss) by operating segment $ 486 $ (63) $ 423 For the Three Months Ended March 31, 2021 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 226 $ 15 $ 241 Protection products revenue 43 — 43 Transaction processing revenue — 51 51 Other income 3 20 23 Total other income subject to ASC 606 (2) 272 86 358 Other income not subject to ASC 606 Loan fee income 107 — 107 Total other income not subject to ASC 606 107 — 107 Total other income by operating segment $ 379 $ 86 $ 465 (1) Net of rewards, including Cashback Bonus rewards, of $635 million and $525 million for the three months ended March 31, 2022 and 2021, respectively. (2) Excludes deposit product fees that are reported within net interest income, which were immaterial for the three months ended March 31, 2022 and 2021. For a detailed description of the Company's significant revenue recognition accounting policies, see Note 2: Summary of Significant Accounting Policies to the consolidated financial statements in the Company's annual report on Form 10-K for the year ended December 31, 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Company has evaluated events and transactions that have occurred subsequent to March 31, 2022, and determined that there were no subsequent events that would require recognition or disclosure in the condensed consolidated financial statements. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for the fair presentation of results for the interim period. All such adjustments are of a normal, recurring nature. |
Use of estimates | The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and related disclosures. These estimates are based on information available as of the date of the condensed consolidated financial statements. The Company believes that the estimates used in the preparation of the condensed consolidated financial statements are reasonable. Actual results could differ from these estimates. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment Securities | The Company's investment securities consist of the following (dollars in millions): March 31, December 31, U.S. Treasury (1) and U.S. GSE (2) securities $ 5,612 $ 6,514 Residential mortgage-backed securities - Agency (2) 365 390 Total investment securities $ 5,977 $ 6,904 (1) Includes $18 million and $27 million of U.S. Treasury securities pledged as swap collateral as of March 31, 2022 and December 31, 2021, respectively. (2) Consists of securities issued by Fannie Mae, Freddie Mac, Ginnie Mae, or the Federal Home Loan Bank. |
Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value | The amortized cost, gross unrealized gains and losses and fair value of available-for-sale and held-to-maturity investment securities are as follows (dollars in millions): Amortized Gross Gross Fair Value At March 31, 2022 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 5,619 $ 25 $ (32) $ 5,612 Residential mortgage-backed securities - Agency 162 — (2) 160 Total available-for-sale investment securities $ 5,781 $ 25 $ (34) $ 5,772 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 205 $ — $ (7) $ 198 Total held-to-maturity investment securities $ 205 $ — $ (7) $ 198 At December 31, 2021 Available-for-Sale Investment Securities (1) U.S. Treasury and U.S. GSE securities $ 6,368 $ 146 $ — $ 6,514 Residential mortgage-backed securities - Agency 181 5 — 186 Total available-for-sale investment securities $ 6,549 $ 151 $ — $ 6,700 Held-to-Maturity Investment Securities (2) Residential mortgage-backed securities - Agency (3) $ 204 $ 3 $ (1) $ 206 Total held-to-maturity investment securities $ 204 $ 3 $ (1) $ 206 (1) Available-for-sale investment securities are reported at fair value. (2) Held-to-maturity investment securities are reported at amortized cost. (3) Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. |
Schedule of Fair Value of Securities in a Continuous Unrealized Loss Position for Less Than 12 Months and More Than 12 Months | The following table provides information about available-for-sale investment securities with aggregate gross unrealized losses and the length of time that individual investment securities have been in a continuous unrealized loss position (dollars in millions): Number of Securities in a Loss Position Less than 12 months More than 12 months Fair Unrealized Fair Unrealized At March 31, 2022 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 18 $ 2,103 $ (32) $ — $ — Residential mortgage-backed securities - Agency 25 $ 144 $ (1) $ 6 $ (1) At December 31, 2021 Available-for-Sale Investment Securities U.S. Treasury and U.S. GSE securities 2 $ 110 NM $ — $ — Residential mortgage-backed securities - Agency 1 $ 7 NM $ — $ — |
Schedule of Maturities of Available-for-Sale Debt Securities and Held-to-Maturity Debt Securities | Maturities of available-for-sale debt securities and held-to-maturity debt securities are provided in the following table (dollars in millions): At March 31, 2022 One Year After One After Five After Ten Total Available-for-Sale Investment Securities — Amortized Cost U.S. Treasury and U.S. GSE securities $ 1,619 $ 3,992 $ 8 $ — $ 5,619 Residential mortgage-backed securities - Agency (1) 1 72 82 7 162 Total available-for-sale investment securities $ 1,620 $ 4,064 $ 90 $ 7 $ 5,781 Held-to-Maturity Investment Securities — Amortized Cost Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 205 $ 205 Total held-to-maturity investment securities $ — $ — $ — $ 205 $ 205 Available-for-Sale Investment Securities — Fair Values U.S. Treasury and U.S. GSE securities $ 1,630 $ 3,974 $ 8 $ — $ 5,612 Residential mortgage-backed securities - Agency (1) 1 71 82 6 160 Total available-for-sale investment securities $ 1,631 $ 4,045 $ 90 $ 6 $ 5,772 Held-to-Maturity Investment Securities — Fair Values Residential mortgage-backed securities - Agency (1) $ — $ — $ — $ 198 $ 198 Total held-to-maturity investment securities $ — $ — $ — $ 198 $ 198 (1) Maturities of RMBS are reflective of the contractual maturities of the investment. |
Loan Receivables (Tables)
Loan Receivables (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Loan Receivables | The Company's classes of receivables within the two portfolio segments are depicted in the following table (dollars in millions): March 31, December 31, Credit card loans (1)(2) $ 73,783 $ 74,369 Other loans (3) Private student loans (4) 10,314 10,113 Personal loans 6,904 6,936 Other loans 2,470 2,266 Total other loans 19,688 19,315 Total loan receivables 93,471 93,684 Allowance for credit losses (6,647) (6,822) Net loan receivables $ 86,824 $ 86,862 (1) Amounts include carrying values of $10.7 billion and $13.3 billion underlying investors' interest in trust debt at March 31, 2022 and December 31, 2021, respectively, and $13.3 billion and $11.9 billion in seller's interest at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. (2) Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $424 million and $423 million at March 31, 2022 and December 31, 2021, respectively. (3) Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $457 million, $41 million and $6 million, respectively, at March 31, 2022 and $443 million, $42 million and $6 million, respectively, at December 31, 2021. (4) Amounts include carrying values of $196 million and $207 million in loans pledged as collateral against the note issued from a private student loan securitization trust at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. |
Schedule of Credit Risk Profile by FICO Score and Origination Year | The following table provides the distribution of the amortized cost basis (excluding accrued interest receivable presented in other assets) by the most recent FICO scores available for the Company's customers for credit card, private student and personal loan receivables (dollars in millions): Credit Risk Profile by FICO Score March 31, 2022 December 31, 2021 660 and Above Less than 660 660 and Above Less than 660 $ % $ % $ % $ % Credit card loans (1) $ 61,199 83 % $ 12,584 17 % $ 62,262 84 % $ 12,107 16 % Private student loans by origination year (2)(3) 2022 $ 220 98 % $ 4 2 % 2021 1,718 94 % 108 6 % $ 1,251 94 % $ 73 6 % 2020 1,494 96 % 61 4 % 1,561 96 % 59 4 % 2019 1,361 96 % 61 4 % 1,439 96 % 61 4 % 2018 1,073 95 % 59 5 % 1,147 95 % 59 5 % Prior 3,915 94 % 240 6 % 4,215 94 % 248 6 % Total private student loans $ 9,781 95 % $ 533 5 % $ 9,613 95 % $ 500 5 % Personal loans by origination year 2022 $ 984 100 % $ 4 — % 2021 2,941 98 % 54 2 % $ 3,326 99 % $ 37 1 % 2020 1,356 97 % 40 3 % 1,622 98 % 39 2 % 2019 848 94 % 56 6 % 1,052 94 % 62 6 % 2018 343 90 % 38 10 % 435 91 % 44 9 % Prior 206 86 % 34 14 % 276 87 % 43 13 % Total personal loans $ 6,678 97 % $ 226 3 % $ 6,711 97 % $ 225 3 % (1) Amounts include $754 million and $813 million of revolving line-of-credit arrangements that were converted to term loans as a result of a TDR program as of March 31, 2022 and December 31, 2021, respectively. (2) A majority of private student loan originations occur in the third quarter and disbursements can span multiple calendar years. (3) FICO score represents the higher credit score of the cosigner or borrower. |
Schedule of Delinquent Loans by Origination Year | The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent loans in the Company's loan portfolio is shown below for credit card, private student and personal loan receivables (dollars in millions): March 31, 2022 December 31, 2021 30-89 Days 90 or Total Past 30-89 Days 90 or Total Past Credit card loans $ 692 $ 613 $ 1,305 $ 670 $ 562 $ 1,232 Private student loans by origination year (1) 2022 $ — $ — $ — 2021 1 1 2 $ — $ — $ — 2020 6 4 10 4 1 5 2019 11 4 15 9 2 11 2018 15 6 21 14 4 18 Prior 92 28 120 94 29 123 Total private student loans $ 125 $ 43 $ 168 $ 121 $ 36 $ 157 Personal loans by origination year 2022 $ — $ — $ — 2021 8 2 10 $ 5 $ 1 $ 6 2020 7 3 10 7 2 9 2019 10 4 14 11 4 15 2018 5 2 7 6 3 9 Prior 5 2 7 6 3 9 Total personal loans $ 35 $ 13 $ 48 $ 35 $ 13 $ 48 (1) Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. |
Schedule of Changes in the Allowance for Credit Losses | The following tables provide changes in the Company's allowance for credit losses (dollars in millions): For the Three Months Ended March 31, 2022 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2021 $ 5,273 $ 843 $ 662 $ 44 $ 6,822 Additions Provision for credit losses (1) 178 45 (30) — 193 Deductions Charge-offs (541) (24) (38) — (603) Recoveries 210 6 19 — 235 Net charge-offs (331) (18) (19) — (368) Balance at March 31, 2022 $ 5,120 $ 870 $ 613 $ 44 $ 6,647 For the Three Months Ended March 31, 2021 Credit Card Loans Private Student Loans Personal Loans Other Loans Total Loans Balance at December 31, 2020 $ 6,491 $ 840 $ 857 $ 38 $ 8,226 Additions Provision for credit losses (1) (377) 36 (4) 3 (342) Deductions Charge-offs (663) (20) (64) — (747) Recoveries 189 6 15 — 210 Net charge-offs (474) (14) (49) — (537) Balance at March 31, 2021 $ 5,640 $ 862 $ 804 $ 41 $ 7,347 (1) Excludes a $39 million and $23 million adjustment of the liability for expected credit losses on unfunded commitments for the three months ended March 31, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in the Company's condensed consolidated statements of financial condition. |
Schedule of Net Charge-offs of Interest and Fee Revenues on Loan Receivables | Net charge-offs of principal are recorded against the allowance for credit losses, as shown in the preceding table. Information regarding net charge-offs of interest and fee revenues on credit card and other loans is as follows (dollars in millions): For the Three Months Ended March 31, 2022 2021 Interest and fees accrued subsequently charged-off, net of recoveries (recorded as a reduction of interest income) $ 66 $ 95 Fees accrued subsequently charged-off, net of recoveries (recorded as a reduction to other income) $ 21 $ 23 |
Schedule of Delinquent and Non-Accruing Loans | The amortized cost basis (excluding accrued interest receivable presented in other assets) of delinquent and non-accruing loans in the Company's loan portfolio is shown below for each class of loan receivables (dollars in millions): 30-89 Days 90 or Total Past 90 or Total Non-accruing (1) At March 31, 2022 Credit card loans $ 692 $ 613 $ 1,305 $ 592 $ 183 Other loans Private student loans 125 43 168 42 7 Personal loans 35 13 48 12 6 Other loans 7 9 16 2 17 Total other loans 167 65 232 56 30 Total loan receivables $ 859 $ 678 $ 1,537 $ 648 $ 213 At December 31, 2021 Credit card loans $ 670 $ 562 $ 1,232 $ 527 $ 194 Other loans Private student loans 121 36 157 35 8 Personal loans 35 13 48 12 7 Other loans 7 7 14 1 16 Total other loans 163 56 219 48 31 Total loan receivables $ 833 $ 618 $ 1,451 $ 575 $ 225 (1) The Company estimates that the gross interest income that would have been recorded under the original terms of non-accruing credit card loans was $6 million and $8 million for the three months ended March 31, 2022 and 2021, respectively. The Company does not separately track the amount of gross interest income that would have been recorded under the original terms of loans. Instead, the Company estimated this amount based on customers' current balances and most recent interest rates. |
Schedule of Loans That Entered a Modification Program During the Period | The following table provides information on loans that entered a TDR program during the period (dollars in millions): For the Three Months Ended March 31, 2022 2021 Number of Accounts Balances Number of Accounts Balances Accounts that entered a TDR program during the period Credit card loans (1) 54,511 $ 344 20,702 $ 135 Private student loans 1,755 $ 31 126 $ 2 Personal loans 1,159 $ 15 1,390 $ 17 (1) Accounts that entered a credit card TDR program include $75 million and $128 million that were converted from revolving line-of-credit arrangements to term loans during the three months ended March 31, 2022 and 2021, respectively. |
Schedule of Troubled Debt Restructurings That Subsequently Defaulted | The following table presents the carrying value of loans that experienced a default during the period that had been modified in a TDR during the 15 months preceding the end of each period (dollars in millions): For the Three Months Ended March 31, 2022 2021 Number of Accounts Aggregated Outstanding Balances Upon Default Number of Accounts Aggregated Outstanding Balances Upon Default TDRs that subsequently defaulted Credit card loans (1)(2) 4,535 $ 23 6,001 $ 36 Private student loans (3) 106 $ 2 66 $ 2 Personal loans (2) 261 $ 3 527 $ 7 (1) For credit card loans that default from a temporary loan modification program, accounts revert back to the pre-modification terms and charging privileges remain suspended in most cases. (2) For credit card loans and personal loans, a customer defaults from a loan modification program after either two consecutive missed payments or at charge-off, depending on the program. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. |
Credit Card and Private Stude_2
Credit Card and Private Student Loan Securitization Activities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Variable Interest Entities Disclosure [Abstract] | |
Schedule of Restricted Credit Card Securitized Assets | The carrying values of these restricted assets, which are presented on the Company's condensed consolidated statements of financial condition as relating to securitization activities, are shown in the following table (dollars in millions): March 31, December 31, Restricted cash $ 9 $ 2,574 Investors' interests held by third-party investors 7,625 9,425 Investors' interests held by wholly owned subsidiaries of Discover Bank 3,102 3,899 Seller's interest 13,308 11,918 Loan receivables (1) 24,035 25,242 Allowance for credit losses allocated to securitized loan receivables (1) (1,231) (1,371) Net loan receivables 22,804 23,871 Other assets 3 3 Carrying value of assets of consolidated variable interest entities $ 22,816 $ 26,448 (1) The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP. |
Schedule of Restricted Private Student Loan Securitized Assets | The carrying values of these restricted assets, which are presented on the Company's condensed consolidated statements of financial condition as relating to securitization activities, are shown in the following table (dollars in millions): March 31, December 31, Restricted cash $ 9 $ 8 Private student loan receivables 196 207 Carrying value of assets of consolidated variable interest entities $ 205 $ 215 |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Deposits [Abstract] | |
Schedule of Certificates of Deposit Maturities | The following table summarizes certificates of deposits maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): At March 31, 2022 2022 $ 9,586 2023 4,851 2024 1,669 2025 904 2026 864 Thereafter 789 Total $ 18,663 |
Long-Term Borrowings (Tables)
Long-Term Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Borrowings and Weighted Average Interest Rates | Long-term borrowings consist of borrowings having original maturities of one year or more. The following table provides a summary of the Company's long-term borrowings and weighted-average interest rates on outstanding balances (dollars in millions): March 31, 2022 December 31, 2021 Maturity Interest Weighted-Average Interest Rate Outstanding Amount Outstanding Amount Securitized Debt Fixed-rate asset-backed securities (1) 2022-2026 0.58% - 3.03% 1.70% $ 5,019 $ 5,588 Floating-rate asset-backed securities (2) 2022-2024 0.73% - 1.00% 0.84% 2,598 3,347 Total Discover Card Master Trust I and Discover Card Execution Note Trust 7,617 8,935 Floating-rate asset-backed security (3)(4) 2031 4.50% 4.50% 98 104 Total private student loan securitization trust 98 104 Total long-term borrowings - owed to securitization investors 7,715 9,039 Discover Financial Services (Parent Company) Fixed-rate senior notes 2022-2027 3.75% - 5.20% 4.17% 3,394 3,382 Fixed-rate retail notes 2022-2031 2.85% - 4.40% 3.75% 166 166 Discover Bank Fixed-rate senior bank notes (1) 2023-2030 2.45% - 4.65% 3.63% 5,362 5,385 Fixed-rate subordinated bank notes (1) 2028 4.68% 4.68% 495 505 Total long-term borrowings $ 17,132 $ 18,477 (1) The Company uses interest rate swaps to hedge portions of these long-term borrowings against changes in fair value attributable to changes in the London Interbank Offered Rate ("LIBOR") or Overnight Index Swap ("OIS") rates. The use of these interest rate swaps impacts the carrying value of the debt. See Note 15: Derivatives and Hedging Activities. (2) DCENT floating-rate asset-backed securities include issuances with the following interest rate terms: 1-month LIBOR + 33 to 60 basis points as of March 31, 2022. (3) The private student loan securitization trust floating-rate asset-backed security includes an issuance with the following interest rate term: Prime rate + 100 basis points as of March 31, 2022. (4) Repayment of this debt is dependent upon the timing of principal and interest payments on the underlying private student loans. The date shown represents the final maturity date. |
Schedule of Long-Term Borrowings Maturities | The following table summarizes long-term borrowings maturing over the remainder of this year, over each of the next four years and thereafter (dollars in millions): March 31, 2022 2022 $ 2,638 2023 3,295 2024 3,731 2025 1,775 2026 2,666 Thereafter 3,027 Total $ 17,132 |
Preferred Stock (Tables)
Preferred Stock (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Stock by Class | The table below presents a summary of the Company's non-cumulative perpetual preferred stock that is outstanding at March 31, 2022 (dollars in millions, except per depositary share amounts): Series Description Initial Issuance Date Liquidation Preference and Redemption Price per Depositary Share (1) Per Annum Dividend Rate in effect at March 31, 2022 Total Depositary Shares Authorized, Issued and Outstanding Carrying Value March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021 C (2)(3)(4) Fixed-to-Floating Rate 10/31/2017 $ 1,000 5.500 % 570,000 570,000 $ 563 $ 563 D (2)(5)(6) Fixed-Rate Reset 6/22/2020 $ 1,000 6.125 % 500,000 500,000 493 493 Total Preferred Stock 1,070,000 1,070,000 $ 1,056 $ 1,056 (1) Redeemable at the redemption price plus declared and unpaid dividends. (2) Issued as depositary shares, each representing 1/100 th interest in a share of the corresponding series of preferred stock. Each preferred share has a par value of $0.01. (3) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part on any dividend payment date on or after October 30, 2027, or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series C preferred stock). (4) Any dividends declared are payable semi-annually in arrears at a rate of 5.50% per annum until October 30, 2027. Thereafter, dividends declared will be payable quarterly in arrears at a floating rate equal to 3-month LIBOR plus a spread of 3.076% per annum. (5) Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part during the three-month period prior to, and including, each reset date (as defined in the certificate of designations for the Series D preferred stock) or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series D Preferred Stock). (6) Any dividends declared are payable semi-annually in arrears at a rate of 6.125% per annum until September 23, 2025, after which the dividend rate will reset every five years to a fixed annual rate equal to the 5-year Treasury plus a spread of 5.783%. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | Changes in each component of accumulated other comprehensive income ("AOCI") were as follows (dollars in millions): Unrealized Gains (Losses) on Available-for-Sale Investment Securities, Net of Tax Losses on Cash Flow Hedges, Net of Tax Losses on Pension Plan, Net of Tax AOCI For the Three Months Ended March 31, 2022 Balance at December 31, 2021 $ 114 $ (9) $ (199) $ (94) Net change (121) 2 — (119) Balance at March 31, 2022 $ (7) $ (7) $ (199) $ (213) For the Three Months Ended March 31, 2021 Balance at December 31, 2020 $ 284 $ (12) $ (227) $ 45 Net change (53) 1 — (52) Balance at March 31, 2021 $ 231 $ (11) $ (227) $ (7) |
Schedule of Other Comprehensive Income Before Reclassifications and Amounts Reclassified from AOCI | The following table presents each component of other comprehensive income ("OCI") before reclassifications and amounts reclassified from AOCI for each component of OCI before- and after-tax (dollars in millions): Before Tax Tax Benefit Net of Tax For the Three Months Ended March 31, 2022 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (160) $ 39 $ (121) Net change $ (160) $ 39 $ (121) Cash Flow Hedges Net unrealized losses arising during the period $ (1) $ — $ (1) Amounts reclassified from AOCI 1 2 3 Net change $ — $ 2 $ 2 For the Three Months Ended March 31, 2021 Available-for-Sale Investment Securities Net unrealized holding losses arising during the period $ (71) $ 18 $ (53) Net change $ (71) $ 18 $ (53) Cash Flow Hedges Amounts reclassified from AOCI $ 1 $ — $ 1 Net change $ 1 $ — $ 1 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Calculation | The following table presents the calculation of the Company's effective income tax rate (dollars in millions): For the Three Months Ended March 31, 2022 2021 Income before income taxes $ 1,618 $ 2,079 Income tax expense $ 376 $ 486 Effective income tax rate 23.3 % 23.4 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted EPS | The following table presents the calculation of basic and diluted earnings per share ("EPS") (dollars and shares in millions, except per share amounts): For the Three Months Ended March 31, 2022 2021 Numerator Net income $ 1,242 $ 1,593 Preferred stock dividends (31) (39) Net income available to common stockholders 1,211 1,554 Income allocated to participating securities (6) (8) Net income allocated to common stockholders $ 1,205 $ 1,546 Denominator Weighted-average shares of common stock outstanding 285 307 Weighted-average shares of common stock outstanding and common stock equivalents 285 307 Basic earnings per common share $ 4.23 $ 5.04 Diluted earnings per common share $ 4.22 $ 5.04 |
Capital Adequacy (Tables)
Capital Adequacy (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Schedule of Minimum and Well-Capitalized Requirements | The following table shows the actual capital amounts and ratios of DFS and Discover Bank and comparisons of each to the regulatory minimum and "well-capitalized" requirements (dollars in millions): Actual Minimum Capital Capital Requirements Amount Ratio (1) Amount Ratio Amount (2) Ratio (2) March 31, 2022 Total capital (to risk-weighted assets) Discover Financial Services $ 16,724 17.6 % $ 7,585 ≥8.0% $ 9,481 ≥10.0% Discover Bank $ 15,647 16.7 % $ 7,475 ≥8.0% $ 9,344 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services $ 15,002 15.8 % $ 5,689 ≥6.0% $ 5,689 ≥6.0% Discover Bank $ 13,741 14.7 % $ 5,607 ≥6.0% $ 7,475 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services $ 15,002 13.7 % $ 4,367 ≥4.0% N/A N/A Discover Bank $ 13,741 12.8 % $ 4,309 ≥4.0% $ 5,386 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services $ 13,946 14.7 % $ 4,266 ≥4.5% N/A N/A Discover Bank $ 13,741 14.7 % $ 4,205 ≥4.5% $ 6,074 ≥6.5% December 31, 2021 Total capital (to risk-weighted assets) Discover Financial Services $ 17,150 17.6 % $ 7,775 ≥8.0% $ 9,719 ≥10.0% Discover Bank $ 15,957 16.9 % $ 7,573 ≥8.0% $ 9,466 ≥10.0% Tier 1 capital (to risk-weighted assets) Discover Financial Services $ 15,395 15.8 % $ 5,831 ≥6.0% $ 5,831 ≥6.0% Discover Bank $ 13,932 14.7 % $ 5,680 ≥6.0% $ 7,573 ≥8.0% Tier 1 capital (to average assets) Discover Financial Services $ 15,395 13.9 % $ 4,432 ≥4.0% N/A N/A Discover Bank $ 13,932 12.8 % $ 4,365 ≥4.0% $ 5,456 ≥5.0% Common Equity Tier 1 (to risk-weighted assets) Discover Financial Services $ 14,339 14.8 % $ 4,373 ≥4.5% N/A N/A Discover Bank $ 13,932 14.7 % $ 4,260 ≥4.5% $ 6,153 ≥6.5% (1) Capital ratios are calculated based on the Basel III standardized approach rules, subject to applicable transition provisions, including CECL transition provisions. (2) The Basel III rules do not establish well-capitalized thresholds for these measures for bank holding companies. Existing well-capitalized thresholds established in the Federal Reserve's Regulation Y have been included where available. |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Guarantor Obligations [Line Items] | |
Schedule of Maximum Potential Counterparty Exposures Related to Settlement Guarantees and Merchant Chargeback Guarantee | The following table summarizes certain information regarding merchant chargeback guarantees (dollars in millions): For the Three Months Ended March 31, 2022 2021 Aggregate sales transaction volume (1) $ 57,153 $ 47,487 (1) Represents transactions processed on the Discover Network for which a potential liability exists that, in aggregate, can differ from credit card sales volume. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are as follows (dollars in millions): Quoted Price Significant Significant Total Balance at March 31, 2022 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 5,604 $ 8 $ — $ 5,612 Residential mortgage-backed securities - Agency — 160 — 160 Available-for-sale investment securities $ 5,604 $ 168 $ — $ 5,772 Fair value - Net income Marketable equity securities $ 272 $ — $ — $ 272 Balance at December 31, 2021 Assets Fair value - OCI U.S. Treasury and U.S. GSE securities $ 6,505 $ 9 $ — $ 6,514 Residential mortgage-backed securities - Agency — 186 — 186 Available-for-sale investment securities $ 6,505 $ 195 $ — $ 6,700 Fair value - Net income Marketable equity securities $ 461 $ — $ — $ 461 . |
Schedule of Financial Instruments Measured at Other Than Fair Value | The following tables disclose the estimated fair value of the Company's financial assets and financial liabilities that are not required to be carried at fair value (dollars in millions): Balance at March 31, 2022 Quoted Prices in Active Markets Significant Significant Total Carrying Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 198 $ — $ 198 $ 205 Held-to-maturity investment securities $ — $ 198 $ — $ 198 $ 205 Net loan receivables $ — $ — $ 93,725 $ 93,725 $ 86,824 Carrying value approximates fair value (1) Cash and cash equivalents $ 9,625 $ — $ — $ 9,625 $ 9,625 Restricted cash $ 18 $ — $ — $ 18 $ 18 Accrued interest receivables (2) $ — $ 956 $ — $ 956 $ 956 Liabilities Amortized cost Time deposits (3) $ — $ 18,843 $ — $ 18,843 $ 18,663 Long-term borrowings - owed to securitization investors $ — $ 7,511 $ 98 $ 7,609 $ 7,715 Other long-term borrowings — 9,521 — 9,521 9,417 Long-term borrowings $ — $ 17,032 $ 98 $ 17,130 $ 17,132 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 108 $ — $ 108 $ 108 Balance at December 31, 2021 Quoted Prices in Active Markets Significant Significant Total Carrying Assets Amortized cost Residential mortgage-backed securities - Agency $ — $ 206 $ — $ 206 $ 204 Held-to-maturity investment securities $ — $ 206 $ — $ 206 $ 204 Net loan receivables $ — $ — $ 94,176 $ 94,176 $ 86,862 Carrying value approximates fair value (1) Cash and cash equivalents $ 8,750 $ — $ — $ 8,750 $ 8,750 Restricted cash $ 2,582 $ — $ — $ 2,582 $ 2,582 Accrued interest receivables (2) $ — $ 948 $ — $ 948 $ 948 Liabilities Amortized cost Time deposits (3) $ — $ 21,490 $ — $ 21,490 $ 21,125 Short-term borrowings $ — $ 1,750 $ — $ 1,750 $ 1,750 Long-term borrowings - owed to securitization investors $ — $ 8,953 $ 104 $ 9,057 $ 9,039 Other long-term borrowings — 10,013 — 10,013 9,438 Long-term borrowings $ — $ 18,966 $ 104 $ 19,070 $ 18,477 Carrying value approximates fair value (1) Accrued interest payables (2) $ — $ 184 $ — $ 184 $ 184 (1) The carrying values of these assets and liabilities approximate fair value due to their short-term nature. (2) Accrued interest receivable and payable carrying values are presented as part of other assets or accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. (3) Excludes deposits without contractually defined maturities for all periods presented. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value and Outstanding Notional Amounts of Derivative Instruments and Related Collateral Balances | The following table summarizes the fair value (including accrued interest) and outstanding notional amounts of derivative instruments and related collateral balances (dollars in millions): March 31, 2022 December 31, 2021 Notional Number of Outstanding Derivative Contracts Derivative Assets (1) Derivative Liabilities (1) Notional Derivative Assets (1) Derivative Liabilities (1) Derivatives designated as hedges Interest rate swaps—cash flow hedge $ 250 1 $ — $ — $ 250 $ — $ — Interest rate swaps—fair value hedge $ 3,425 4 — — $ 6,125 — — Derivatives not designated as hedges Foreign exchange forward contracts (2) $ 30 7 — — $ 36 — — Total gross derivative assets/liabilities (3) — — — — Less: collateral held/posted (4) — — — — Total net derivative assets/liabilities $ — $ — $ — $ — (1) The gross and net derivative assets and liabilities were immaterial as of March 31, 2022 and December 31, 2021. (2) The foreign exchange forward contracts have notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 6 million as of March 31, 2022, and notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 14 million as of December 31, 2021. (3) In addition to the derivatives disclosed in the table, the Company enters into forward contracts to purchase when-issued mortgage-backed securities as part of its community reinvestment initiatives. At March 31, 2022 and December 31, 2021, the Company had one outstanding contract with a total notional amount of $36 million and $50 million, respectively, and immaterial fair values. (4) Collateral amounts, which consist of cash and investment securities, are limited to the related derivative asset/liability balance and do not include excess collateral received/pledged. |
Schedule of Hedged Items in Fair Value Hedging Relationship | The following amounts were recorded on the statements of financial condition related to cumulative basis adjustments for fair value hedges (dollars in millions): March 31, 2022 December 31, 2021 Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Increasing the Carrying Amount of Hedged Liabilities (1) Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Increasing the Carrying Amount of Hedged Liabilities (1) Long-term borrowings $ 3,427 $ 31 $ 6,158 $ 83 (1) The balance includes $43 million and $48 million of cumulative hedging adjustments related to discontinued hedging relationships as of March 31, 2022 and December 31, 2021, respectively. |
Schedule of Impact of the Derivative Instruments on Income | The following table summarizes the impact of the derivative instruments on income and indicates where within the condensed consolidated financial statements such impact is reported (dollars in millions): Location and Amount of (Losses) Gains Recognized on the Condensed Consolidated Statements of Income Interest Expense Long-Term Borrowings For the Three Months Ended March 31, 2022 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (117) The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (1) Gains on fair value hedging relationships Gains on hedged items $ 47 Losses on interest rate swaps (32) Total gains on fair value hedging relationships $ 15 For the Three Months Ended March 31, 2021 Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded $ (123) The effects of cash flow and fair value hedging Losses on cash flow hedging relationships Amounts reclassified from OCI into earnings $ (1) Gains on fair value hedging relationships Gains on hedged items $ 78 Losses on interest rate swaps (30) Total gains on fair value hedging relationships $ 48 |
Segment Disclosures (Tables)
Segment Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Disclosures | The following table presents segment data (dollars in millions): Digital Payment Total For the Three Months Ended March 31, 2022 Interest income Credit card loans $ 2,268 $ — $ 2,268 Private student loans 190 — 190 Personal loans 206 — 206 Other loans 32 — 32 Other interest income 40 — 40 Total interest income 2,736 — 2,736 Interest expense 257 — 257 Net interest income 2,479 — 2,479 Provision for credit losses 154 — 154 Other income (loss) 486 (63) 423 Other expense 1,092 38 1,130 Income (loss) before income tax expense $ 1,719 $ (101) $ 1,618 For the Three Months Ended March 31, 2021 Interest income Credit card loans $ 2,154 $ — $ 2,154 Private student loans 185 — 185 Personal loans 224 — 224 Other loans 28 — 28 Other interest income 55 — 55 Total interest income 2,646 — 2,646 Interest expense 316 — 316 Net interest income 2,330 — 2,330 Provision for credit losses (365) — (365) Other income 379 86 465 Other expense 1,047 34 1,081 Income before income tax expense $ 2,027 $ 52 $ 2,079 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue from Contracts with Customers Disaggregated by Business Segment | The following table presents revenue from contracts with customers disaggregated by business segment and reconciles revenue from contracts with customers to total other income (dollars in millions): Digital Banking Payment Services Total For the Three Months Ended March 31, 2022 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 298 $ 22 $ 320 Protection products revenue 44 — 44 Transaction processing revenue — 57 57 Other income 3 21 24 Total other income subject to ASC 606 (2) 345 100 445 Other income not subject to ASC 606 Loan fee income 140 — 140 Unrealized gains (losses) on equity investments — (188) (188) Realized gains on equity investments 1 25 26 Total other income (loss) not subject to ASC 606 141 (163) (22) Total other income (loss) by operating segment $ 486 $ (63) $ 423 For the Three Months Ended March 31, 2021 Other income subject to ASC 606 Discount and interchange revenue, net (1) $ 226 $ 15 $ 241 Protection products revenue 43 — 43 Transaction processing revenue — 51 51 Other income 3 20 23 Total other income subject to ASC 606 (2) 272 86 358 Other income not subject to ASC 606 Loan fee income 107 — 107 Total other income not subject to ASC 606 107 — 107 Total other income by operating segment $ 379 $ 86 $ 465 (1) Net of rewards, including Cashback Bonus rewards, of $635 million and $525 million for the three months ended March 31, 2022 and 2021, respectively. (2) Excludes deposit product fees that are reported within net interest income, which were immaterial for the three months ended March 31, 2022 and 2021. |
Background and Basis of Prese_3
Background and Basis of Presentation (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments (in number of segments) | 2 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Investment Holdings [Line Items] | |||
Proceeds from the sale of available-for-sale securities | $ 0 | $ 0 | |
Recognized gains (losses) on available-for-sale securities | 0 | 0 | |
Contingent liabilities related to equity method investments | 0 | ||
Realized gain (loss) on payments services equity investments with readily determinable fair values | 23 | ||
Unrealized (losses) gains on equity investments | (188) | $ 0 | |
Community Reinvestment Act [Member] | |||
Investment Holdings [Line Items] | |||
Affordable housing project equity method investments | 342 | $ 350 | |
Contingent liabilities related to affordable housing project equity method investments | 68 | 80 | |
Other Assets [Member] | Payment Services [Member] | |||
Investment Holdings [Line Items] | |||
Equity securities without readily determinable fair value | 33 | 36 | |
Fair value of payment services equity investments with readily determinable fair values | 272 | 461 | |
Other Assets [Member] | Community Reinvestment Act [Member] | |||
Investment Holdings [Line Items] | |||
Equity method investments | 377 | 388 | |
Other Liabilities [Member] | Community Reinvestment Act [Member] | |||
Investment Holdings [Line Items] | |||
Contingent liabilities related to equity method investments | $ 77 | $ 92 |
Investments (Schedule of Invest
Investments (Schedule of Investment Securities) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Investment Holdings [Line Items] | |||
Investment securities | $ 5,977 | $ 6,904 | |
US Treasury and Government | |||
Investment Holdings [Line Items] | |||
Investment securities | [1],[2] | 5,612 | 6,514 |
Residential Mortgage-Backed Securities - Agency [Member] | Asset Not Pledged as Collateral [Member] | |||
Investment Holdings [Line Items] | |||
Investment securities | [1] | 365 | 390 |
U.S. Treasury Securities [Member] | |||
Investment Holdings [Line Items] | |||
Derivative collateral | $ 18 | $ 27 | |
[1] | Consists of securities issued by Fannie Mae, Freddie Mac, Ginnie Mae, or the Federal Home Loan Bank. | ||
[2] | Includes $18 million and $27 million of U.S. Treasury securities pledged as swap collateral as of March 31, 2022 and December 31, 2021, respectively. |
Investments (Schedule of Amorti
Investments (Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Fair Value) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | ||
Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, amortized cost | [1] | $ 5,781 | $ 6,549 | |
Available-for-sale investment securities, gross unrealized gains | [1] | 25 | 151 | |
Available-for-sale investment securities, gross unrealized losses | [1] | (34) | 0 | |
Available-for-sale investment securities, fair value | [1] | 5,772 | 6,700 | |
Held-to-maturity investment securities, amortized cost | [2] | 205 | 204 | |
Held-to-maturity investment securities, gross unrealized gains | [2] | 0 | 3 | |
Held-to-maturity investment securities, gross unrealized losses | [2] | (7) | (1) | |
Held-to-maturity investment securities, fair value | [2] | 198 | 206 | |
US Treasury and Government | ||||
Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, amortized cost | [1] | 5,619 | 6,368 | |
Available-for-sale investment securities, gross unrealized gains | [1] | 25 | 146 | |
Available-for-sale investment securities, gross unrealized losses | [1] | (32) | 0 | |
Available-for-sale investment securities, fair value | [1] | 5,612 | 6,514 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, amortized cost | [1] | 162 | [3] | 181 |
Available-for-sale investment securities, gross unrealized gains | [1] | 0 | 5 | |
Available-for-sale investment securities, gross unrealized losses | [1] | (2) | 0 | |
Available-for-sale investment securities, fair value | [1] | 160 | [3] | 186 |
Held-to-maturity investment securities, amortized cost | [2],[4] | 205 | [3] | 204 |
Held-to-maturity investment securities, gross unrealized gains | [2],[4] | 0 | 3 | |
Held-to-maturity investment securities, gross unrealized losses | [2],[4] | (7) | (1) | |
Held-to-maturity investment securities, fair value | [2],[4] | $ 198 | [3] | $ 206 |
[1] | Available-for-sale investment securities are reported at fair value. | |||
[2] | Held-to-maturity investment securities are reported at amortized cost. | |||
[3] | Maturities of RMBS are reflective of the contractual maturities of the investment. | |||
[4] | Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. |
Investments (Schedule of Fair V
Investments (Schedule of Fair Value of Securities in a Continuous Unrealized Loss Position for Less Than 12 Months and More Than 12 Months) (Details) $ in Millions | Mar. 31, 2022USD ($)securities | Dec. 31, 2021USD ($)securities |
US Treasury and Government | ||
Summary of Investment Holdings [Line Items] | ||
Available-for-sale investment securities, continuous unrealized loss position, number of securities | securities | 18 | 2 |
Available-for-sale investment securities, continuous unrealized loss position, less than 12 months, fair value | $ 2,103 | $ 110 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (32) | |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, fair value | 0 | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | $ 0 | $ 0 |
Residential Mortgage-Backed Securities - Agency [Member] | ||
Summary of Investment Holdings [Line Items] | ||
Available-for-sale investment securities, continuous unrealized loss position, number of securities | securities | 25 | 1 |
Available-for-sale investment securities, continuous unrealized loss position, less than 12 months, fair value | $ 144 | $ 7 |
Available-for-sale securities, continuous unrealized loss position, less than 12 months, accumulated loss | (1) | |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, fair value | 6 | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | $ 1 | $ 0 |
Investments (Schedule of Maturi
Investments (Schedule of Maturities of Available-for-Sale Debt Securities and Held-to-Maturity Debt Securities) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | ||
Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, debt maturities, one year or less, amortized cost | $ 1,620 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, amortized cost | 4,064 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, amortized cost | 90 | |||
Available-for-sale investment securities, debt maturities, after ten years, amortized cost | 7 | |||
Available-for-sale investment securities, amortized cost | [1] | 5,781 | $ 6,549 | |
Held-to-maturity investment securities, debt maturities, one year or less, amortized cost | 0 | |||
Held-to-maturity investment securities, debt maturities, after one year through five years, amortized cost | 0 | |||
Held-to-maturity investment securities, debt maturities, after five years through ten years, amortized cost | 0 | |||
Held-to-maturity investment securities, debt maturities, after ten years, amortized cost | 205 | |||
Held-to-maturity investment securities, amortized cost | [2] | 205 | 204 | |
Available-for-sale investment securities, debt maturities, one year or less, fair value | 1,631 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, fair value | 4,045 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, fair value | 90 | |||
Available-for-sale investment securities, debt maturities, after ten years, fair value | 6 | |||
Available-for-sale investment securities, fair value | [1] | 5,772 | 6,700 | |
Held-to-maturity investment securities, debt maturities, one year or less, fair value | 0 | |||
Held-to-maturity investment securities, debt maturities, after one year through five years, fair value | 0 | |||
Held-to-maturity investment securities, debt maturities, after five years through ten years, fair value | 0 | |||
Held-to-maturity investment securities, debt maturities, after ten years, fair value | 198 | |||
Held-to-maturity investment securities, fair value | [2] | 198 | 206 | |
US Treasury and Government | ||||
Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, debt maturities, one year or less, amortized cost | 1,619 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, amortized cost | 3,992 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, amortized cost | 8 | |||
Available-for-sale investment securities, debt maturities, after ten years, amortized cost | 0 | |||
Available-for-sale investment securities, amortized cost | [1] | 5,619 | 6,368 | |
Available-for-sale investment securities, debt maturities, one year or less, fair value | 1,630 | |||
Available-for-sale investment securities, debt maturities, after one year through five years, fair value | 3,974 | |||
Available-for-sale investment securities, debt maturities, after five years through ten years, fair value | 8 | |||
Available-for-sale investment securities, debt maturities, after ten years, fair value | 0 | |||
Available-for-sale investment securities, fair value | [1] | 5,612 | 6,514 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Investment Holdings [Line Items] | ||||
Available-for-sale investment securities, debt maturities, one year or less, amortized cost | [3] | 1 | ||
Available-for-sale investment securities, debt maturities, after one year through five years, amortized cost | [3] | 72 | ||
Available-for-sale investment securities, debt maturities, after five years through ten years, amortized cost | [3] | 82 | ||
Available-for-sale investment securities, debt maturities, after ten years, amortized cost | [3] | 7 | ||
Available-for-sale investment securities, amortized cost | [1] | 162 | [3] | 181 |
Held-to-maturity investment securities, debt maturities, one year or less, amortized cost | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after one year through five years, amortized cost | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after five years through ten years, amortized cost | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after ten years, amortized cost | [3] | 205 | ||
Held-to-maturity investment securities, amortized cost | [2],[4] | 205 | [3] | 204 |
Available-for-sale investment securities, debt maturities, one year or less, fair value | [3] | 1 | ||
Available-for-sale investment securities, debt maturities, after one year through five years, fair value | [3] | 71 | ||
Available-for-sale investment securities, debt maturities, after five years through ten years, fair value | [3] | 82 | ||
Available-for-sale investment securities, debt maturities, after ten years, fair value | [3] | 6 | ||
Available-for-sale investment securities, fair value | [1] | 160 | [3] | 186 |
Held-to-maturity investment securities, debt maturities, one year or less, fair value | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after one year through five years, fair value | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after five years through ten years, fair value | [3] | 0 | ||
Held-to-maturity investment securities, debt maturities, after ten years, fair value | [3] | 198 | ||
Held-to-maturity investment securities, fair value | [2],[4] | $ 198 | [3] | $ 206 |
[1] | Available-for-sale investment securities are reported at fair value. | |||
[2] | Held-to-maturity investment securities are reported at amortized cost. | |||
[3] | Maturities of RMBS are reflective of the contractual maturities of the investment. | |||
[4] | Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. |
Loan Receivables (Narrative) (D
Loan Receivables (Narrative) (Details) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2022USD ($)segment | Dec. 31, 2021USD ($) | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Number of loan portfolio segments (in segments) | segment | 2 | |||||
Allowance for credit losses | $ 6,647 | $ 6,822 | $ 7,347 | $ 8,226 | ||
Allowance for credit losses, period increase (decrease) | $ (175) | |||||
Expected Future Peak Unemployment Rate | 5.20% | |||||
Expected EOY Unemployment Rate | 4.90% | |||||
Expected EOY2 Unemployment Rate | 3.50% | |||||
Expected EY Annualized Increase in GDP | 3.10% | |||||
Expected EOY2 Annualized Increase in GDP | 2.20% | |||||
Reasonable and supportable forecast period | 18 months | 18 months | 18 months | 18 months | 18 months | 18 months |
Reversion period | 12 months | 12 months | ||||
Percentage of defaulted loans that were charged off at the end of the month in which they defaulted (in percent) | 64.00% | 68.00% | ||||
Minimum [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Delinquent Loan Qualification Period | 30 days | |||||
Credit Card Loans [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for credit losses | $ 5,120 | $ 5,273 | $ 5,640 | $ 6,491 | ||
Credit Card Loans [Member] | Credit Card Loans [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Maximum period of payment reduction for the temporary reduced payment program (in months) | 12 months | |||||
Interest and fees forgiven due to credit card loan modification program | $ 7 | 12 | ||||
Credit Card Loans [Member] | Credit Card Loans [Member] | Maximum [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Permanent workout program maturity (in months) | 72 months | |||||
Total Other Loans [Member] | Private Student Loans [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for credit losses | $ 870 | 843 | 862 | 840 | ||
Private student loans in repayment | 5,600 | 5,800 | ||||
Private student loans in forbearance | 79 | 64 | ||||
Total Other Loans [Member] | Personal Loans [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for credit losses | $ 613 | $ 662 | $ 804 | $ 857 | ||
Maximum period of payment reduction for the temporary reduced payment program (in months) | 12 months | |||||
Maximum repayment term for permanent modification programs (in years) | 9 years |
Loan Receivables (Schedule of L
Loan Receivables (Schedule of Loan Receivables) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | $ 93,471 | $ 93,684 | |||
Allowance for credit losses | (6,647) | (6,822) | $ (7,347) | $ (8,226) | |
Net loan receivables | 86,824 | 86,862 | |||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | 24,231 | 25,449 | |||
Allowance for credit losses | (1,231) | (1,371) | |||
Credit Card Securitization Trusts [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | [1] | 24,035 | 25,242 | ||
Allowance for credit losses | [1] | (1,231) | (1,371) | ||
Net loan receivables | 22,804 | 23,871 | |||
Seller's interest | 13,308 | 11,918 | |||
Private Student Loan Securitization Trusts [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | 196 | 207 | |||
Credit Card Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | [2],[3] | 73,783 | 74,369 | ||
Allowance for credit losses | (5,120) | (5,273) | (5,640) | (6,491) | |
Accrued interest receivable | 424 | 423 | |||
Credit Card Loans [Member] | Credit Card Securitization Trusts [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Investors' interest | 10,700 | 13,300 | |||
Seller's interest | 13,300 | 11,900 | |||
Total Other Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | [4] | 19,688 | 19,315 | ||
Total Other Loans [Member] | Private Student Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | [4],[5] | 10,314 | 10,113 | ||
Allowance for credit losses | (870) | (843) | (862) | (840) | |
Accrued interest receivable | 457 | 443 | |||
Total Other Loans [Member] | Private Student Loans [Member] | Private Student Loan Securitization Trusts [Member] | Variable Interest Entity, Primary Beneficiary [Member] | Asset Pledged as Collateral [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | 196 | 207 | |||
Total Other Loans [Member] | Personal Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | [4] | 6,904 | 6,936 | ||
Allowance for credit losses | (613) | (662) | (804) | (857) | |
Accrued interest receivable | 41 | 42 | |||
Total Other Loans [Member] | Other Loans [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loan receivables | [4] | 2,470 | 2,266 | ||
Allowance for credit losses | (44) | (44) | $ (41) | $ (38) | |
Accrued interest receivable | $ 6 | $ 6 | |||
[1] | The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP. | ||||
[2] | Amounts include carrying values of $10.7 billion and $13.3 billion underlying investors' interest in trust debt at March 31, 2022 and December 31, 2021, respectively, and $13.3 billion and $11.9 billion in seller's interest at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. | ||||
[3] | Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $424 million and $423 million at March 31, 2022 and December 31, 2021, respectively. | ||||
[4] | Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $457 million, $41 million and $6 million, respectively, at March 31, 2022 and $443 million, $42 million and $6 million, respectively, at December 31, 2021. | ||||
[5] | Amounts include carrying values of $196 million and $207 million in loans pledged as collateral against the note issued from a private student loan securitization trust at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. |
Loan Receivables (Schedule of C
Loan Receivables (Schedule of Credit Risk Profile by FICO Score and Origination Year) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | $ 93,471 | $ 93,684 | |
Revolving line-of-credit arrangements that were converted to term loans as a result of a TDR program, ending balance | 754 | 813 | |
Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [1],[2] | 73,783 | 74,369 |
Credit Card Loans [Member] | FICO Score, 660 and Above [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | [3] | $ 61,199 | $ 62,262 |
FICO distribution %, credit card | [3] | 83.00% | 84.00% |
Credit Card Loans [Member] | FICO Score, Less Than 660 Or No Score [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | [3] | $ 12,584 | $ 12,107 |
FICO distribution %, credit card | [3] | 17.00% | 16.00% |
Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [4] | $ 19,688 | $ 19,315 |
Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [4],[5] | 10,314 | 10,113 |
Total Other Loans [Member] | Private Student Loans [Member] | FICO Score, 660 and Above [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | [6],[7] | $ 220 | |
FICO distribution %, originated in 2022 | [6],[7] | 98.00% | |
Loan receivables, originated in 2021 | [6],[7] | $ 1,718 | $ 1,251 |
FICO distribution %, originated in 2021 | [6],[7] | 94.00% | 94.00% |
Loan receivables, originated in 2020 | [6],[7] | $ 1,494 | $ 1,561 |
FICO distribution %, originated in 2020 | [6],[7] | 96.00% | 96.00% |
Loan receivables, originated in 2019 | [6],[7] | $ 1,361 | $ 1,439 |
FICO distribution %, originated in 2019 | [6],[7] | 96.00% | 96.00% |
Loan receivables, originated in 2018 | [6],[7] | $ 1,073 | $ 1,147 |
FICO distribution %, originated in 2018 | [6],[7] | 95.00% | 95.00% |
Loan receivables, originated prior to 2018 | [6],[7] | $ 3,915 | $ 4,215 |
FICO distribution %, originated prior to 2018 | [6],[7] | 94.00% | 94.00% |
Loan receivables | [6],[7] | $ 9,781 | $ 9,613 |
FICO distribution %, loan receivables | [6],[7] | 95.00% | 95.00% |
Total Other Loans [Member] | Private Student Loans [Member] | FICO Score, Less Than 660 Or No Score [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | [6],[7] | $ 4 | |
FICO distribution %, originated in 2022 | [6],[7] | 2.00% | |
Loan receivables, originated in 2021 | [6],[7] | $ 108 | $ 73 |
FICO distribution %, originated in 2021 | [6],[7] | 6.00% | 6.00% |
Loan receivables, originated in 2020 | [6],[7] | $ 61 | $ 59 |
FICO distribution %, originated in 2020 | [6],[7] | 4.00% | 4.00% |
Loan receivables, originated in 2019 | [6],[7] | $ 61 | $ 61 |
FICO distribution %, originated in 2019 | [6],[7] | 4.00% | 4.00% |
Loan receivables, originated in 2018 | [6],[7] | $ 59 | $ 59 |
FICO distribution %, originated in 2018 | [6],[7] | 5.00% | 5.00% |
Loan receivables, originated prior to 2018 | [6],[7] | $ 240 | $ 248 |
FICO distribution %, originated prior to 2018 | [6],[7] | 6.00% | 6.00% |
Loan receivables | [6],[7] | $ 533 | $ 500 |
FICO distribution %, loan receivables | [6],[7] | 5.00% | 5.00% |
Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [4] | $ 6,904 | $ 6,936 |
Total Other Loans [Member] | Personal Loans [Member] | FICO Score, 660 and Above [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | $ 984 | ||
FICO distribution %, originated in 2022 | 100.00% | ||
Loan receivables, originated in 2021 | $ 2,941 | $ 3,326 | |
FICO distribution %, originated in 2021 | 98.00% | 99.00% | |
Loan receivables, originated in 2020 | $ 1,356 | $ 1,622 | |
FICO distribution %, originated in 2020 | 97.00% | 98.00% | |
Loan receivables, originated in 2019 | $ 848 | $ 1,052 | |
FICO distribution %, originated in 2019 | 94.00% | 94.00% | |
Loan receivables, originated in 2018 | $ 343 | $ 435 | |
FICO distribution %, originated in 2018 | 90.00% | 91.00% | |
Loan receivables, originated prior to 2018 | $ 206 | $ 276 | |
FICO distribution %, originated prior to 2018 | 86.00% | 87.00% | |
Loan receivables | $ 6,678 | $ 6,711 | |
FICO distribution %, loan receivables | 97.00% | 97.00% | |
Total Other Loans [Member] | Personal Loans [Member] | FICO Score, Less Than 660 Or No Score [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | $ 4 | ||
FICO distribution %, originated in 2022 | 0.00% | ||
Loan receivables, originated in 2021 | $ 54 | $ 37 | |
FICO distribution %, originated in 2021 | 2.00% | 1.00% | |
Loan receivables, originated in 2020 | $ 40 | $ 39 | |
FICO distribution %, originated in 2020 | 3.00% | 2.00% | |
Loan receivables, originated in 2019 | $ 56 | $ 62 | |
FICO distribution %, originated in 2019 | 6.00% | 6.00% | |
Loan receivables, originated in 2018 | $ 38 | $ 44 | |
FICO distribution %, originated in 2018 | 10.00% | 9.00% | |
Loan receivables, originated prior to 2018 | $ 34 | $ 43 | |
FICO distribution %, originated prior to 2018 | 14.00% | 13.00% | |
Loan receivables | $ 226 | $ 225 | |
FICO distribution %, loan receivables | 3.00% | 3.00% | |
[1] | Amounts include carrying values of $10.7 billion and $13.3 billion underlying investors' interest in trust debt at March 31, 2022 and December 31, 2021, respectively, and $13.3 billion and $11.9 billion in seller's interest at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. | ||
[2] | Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $424 million and $423 million at March 31, 2022 and December 31, 2021, respectively. | ||
[3] | Amounts include $754 million and $813 million of revolving line-of-credit arrangements that were converted to term loans as a result of a TDR program as of March 31, 2022 and December 31, 2021, respectively. | ||
[4] | Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $457 million, $41 million and $6 million, respectively, at March 31, 2022 and $443 million, $42 million and $6 million, respectively, at December 31, 2021. | ||
[5] | Amounts include carrying values of $196 million and $207 million in loans pledged as collateral against the note issued from a private student loan securitization trust at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. | ||
[6] | A majority of private student loan originations occur in the third quarter and disbursements can span multiple calendar years. | ||
[7] | FICO score represents the higher credit score of the cosigner or borrower. |
Loan Receivables (Schedule of D
Loan Receivables (Schedule of Delinquent Loans by Origination Year) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | $ 93,471 | $ 93,684 | |
Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [1],[2] | 73,783 | 74,369 |
Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3] | 19,688 | 19,315 |
Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3],[4] | 10,314 | 10,113 |
Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | [3] | 6,904 | 6,936 |
30-89 Days Delinquent [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 859 | 833 | |
30-89 Days Delinquent [Member] | Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | 692 | 670 | |
30-89 Days Delinquent [Member] | Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 167 | 163 | |
30-89 Days Delinquent [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | [5] | 0 | |
Loan receivables, originated in 2021 | [5] | 1 | 0 |
Loan receivables, originated in 2020 | [5] | 6 | 4 |
Loan receivables, originated in 2019 | [5] | 11 | 9 |
Loan receivables, originated in 2018 | [5] | 15 | 14 |
Loan receivables, originated prior to 2018 | [5] | 92 | 94 |
Loan receivables | [5] | 125 | 121 |
30-89 Days Delinquent [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | 0 | ||
Loan receivables, originated in 2021 | 8 | 5 | |
Loan receivables, originated in 2020 | 7 | 7 | |
Loan receivables, originated in 2019 | 10 | 11 | |
Loan receivables, originated in 2018 | 5 | 6 | |
Loan receivables, originated prior to 2018 | 5 | 6 | |
Loan receivables | 35 | 35 | |
90 or More Days Delinquent [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 678 | 618 | |
90 or More Days Delinquent [Member] | Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | 613 | 562 | |
90 or More Days Delinquent [Member] | Total Other Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables | 65 | 56 | |
90 or More Days Delinquent [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | [5] | 0 | |
Loan receivables, originated in 2021 | [5] | 1 | 0 |
Loan receivables, originated in 2020 | [5] | 4 | 1 |
Loan receivables, originated in 2019 | [5] | 4 | 2 |
Loan receivables, originated in 2018 | [5] | 6 | 4 |
Loan receivables, originated prior to 2018 | [5] | 28 | 29 |
Loan receivables | [5] | 43 | 36 |
90 or More Days Delinquent [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | 0 | ||
Loan receivables, originated in 2021 | 2 | 1 | |
Loan receivables, originated in 2020 | 3 | 2 | |
Loan receivables, originated in 2019 | 4 | 4 | |
Loan receivables, originated in 2018 | 2 | 3 | |
Loan receivables, originated prior to 2018 | 2 | 3 | |
Loan receivables | 13 | 13 | |
Total Past Due [Member] | Credit Card Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, credit card | 1,305 | 1,232 | |
Total Past Due [Member] | Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | [5] | 0 | |
Loan receivables, originated in 2021 | [5] | 2 | 0 |
Loan receivables, originated in 2020 | [5] | 10 | 5 |
Loan receivables, originated in 2019 | [5] | 15 | 11 |
Loan receivables, originated in 2018 | [5] | 21 | 18 |
Loan receivables, originated prior to 2018 | [5] | 120 | 123 |
Loan receivables | [5] | 168 | 157 |
Total Past Due [Member] | Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Loan receivables, originated in 2022 | 0 | ||
Loan receivables, originated in 2021 | 10 | 6 | |
Loan receivables, originated in 2020 | 10 | 9 | |
Loan receivables, originated in 2019 | 14 | 15 | |
Loan receivables, originated in 2018 | 7 | 9 | |
Loan receivables, originated prior to 2018 | 7 | 9 | |
Loan receivables | $ 48 | $ 48 | |
[1] | Amounts include carrying values of $10.7 billion and $13.3 billion underlying investors' interest in trust debt at March 31, 2022 and December 31, 2021, respectively, and $13.3 billion and $11.9 billion in seller's interest at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. | ||
[2] | Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $424 million and $423 million at March 31, 2022 and December 31, 2021, respectively. | ||
[3] | Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $457 million, $41 million and $6 million, respectively, at March 31, 2022 and $443 million, $42 million and $6 million, respectively, at December 31, 2021. | ||
[4] | Amounts include carrying values of $196 million and $207 million in loans pledged as collateral against the note issued from a private student loan securitization trust at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. | ||
[5] | Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. |
Loan Receivables (Schedule of_2
Loan Receivables (Schedule of Changes in the Allowance for Credit Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses, balance at beginning of period | $ 6,822 | $ 8,226 | |
Provision for credit losses(1) | [1] | 193 | (342) |
Charge-offs | (603) | (747) | |
Recoveries | 235 | 210 | |
Net charge-offs | (368) | (537) | |
Allowance for credit losses, balance at end of period | 6,647 | 7,347 | |
Credit loss build (release) on unfunded commitments | (39) | 23 | |
Credit Card Loans [Member] | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses, balance at beginning of period | 5,273 | 6,491 | |
Provision for credit losses(1) | [1] | 178 | (377) |
Charge-offs | (541) | (663) | |
Recoveries | 210 | 189 | |
Net charge-offs | (331) | (474) | |
Allowance for credit losses, balance at end of period | 5,120 | 5,640 | |
Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses, balance at beginning of period | 843 | 840 | |
Provision for credit losses(1) | [1] | 45 | 36 |
Charge-offs | (24) | (20) | |
Recoveries | 6 | 6 | |
Net charge-offs | (18) | (14) | |
Allowance for credit losses, balance at end of period | 870 | 862 | |
Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses, balance at beginning of period | 662 | 857 | |
Provision for credit losses(1) | [1] | (30) | (4) |
Charge-offs | (38) | (64) | |
Recoveries | 19 | 15 | |
Net charge-offs | (19) | (49) | |
Allowance for credit losses, balance at end of period | 613 | 804 | |
Total Other Loans [Member] | Other Loans [Member] | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses, balance at beginning of period | 44 | 38 | |
Provision for credit losses(1) | [1] | 0 | 3 |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
Net charge-offs | 0 | 0 | |
Allowance for credit losses, balance at end of period | $ 44 | $ 41 | |
[1] | Excludes a $39 million and $23 million adjustment of the liability for expected credit losses on unfunded commitments for the three months ended March 31, 2022 and 2021, respectively, as the liability is recorded in accrued expenses and other liabilities in the Company's condensed consolidated statements of financial condition. |
Loan Receivables (Schedule of N
Loan Receivables (Schedule of Net Charge-offs of Interest and Fee Revenues on Loan Receivables) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Receivables [Abstract] | ||
Interest and fees accrued subsequently charged-off, net of recoveries (recorded as a reduction of interest income) | $ 66 | $ 95 |
Fees accrued subsequently charged-off, net of recoveries (recorded as a reduction to other income) | $ 21 | $ 23 |
Loan Receivables (Schedule of_3
Loan Receivables (Schedule of Delinquent and Non-Accruing Loans) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | ||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, 90 or more days delinquent and accruing | $ 648 | $ 575 | ||
Loan receivables, total non-accruing | [1] | 213 | 225 | |
Loan receivables | 93,471 | 93,684 | ||
30-89 Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 859 | 833 | ||
90 or More Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 678 | 618 | ||
Financial Asset, Past Due | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 1,537 | 1,451 | ||
Credit Card Loans [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, 90 or more days delinquent and accruing | 592 | 527 | ||
Loan receivables, total non-accruing | [1] | 183 | 194 | |
Loan receivables | [2],[3] | 73,783 | 74,369 | |
Estimated gross interest income that would have been recorded based on original terms | 6 | $ 8 | ||
Credit Card Loans [Member] | 30-89 Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, credit card | 692 | 670 | ||
Credit Card Loans [Member] | 90 or More Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, credit card | 613 | 562 | ||
Credit Card Loans [Member] | Financial Asset, Past Due | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, credit card | 1,305 | 1,232 | ||
Total Other Loans [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, 90 or more days delinquent and accruing | 56 | 48 | ||
Loan receivables, total non-accruing | [1] | 30 | 31 | |
Loan receivables | [4] | 19,688 | 19,315 | |
Total Other Loans [Member] | 30-89 Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 167 | 163 | ||
Total Other Loans [Member] | 90 or More Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 65 | 56 | ||
Total Other Loans [Member] | Financial Asset, Past Due | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 232 | 219 | ||
Total Other Loans [Member] | Private Student Loans [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, 90 or more days delinquent and accruing | 42 | 35 | ||
Loan receivables, total non-accruing | [1] | 7 | 8 | |
Loan receivables | [4],[5] | 10,314 | 10,113 | |
Total Other Loans [Member] | Private Student Loans [Member] | 30-89 Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | [6] | 125 | 121 | |
Total Other Loans [Member] | Private Student Loans [Member] | 90 or More Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | [6] | 43 | 36 | |
Total Other Loans [Member] | Private Student Loans [Member] | Financial Asset, Past Due | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 168 | 157 | ||
Total Other Loans [Member] | Personal Loans [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, 90 or more days delinquent and accruing | 12 | 12 | ||
Loan receivables, total non-accruing | [1] | 6 | 7 | |
Loan receivables | [4] | 6,904 | 6,936 | |
Total Other Loans [Member] | Personal Loans [Member] | 30-89 Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 35 | 35 | ||
Total Other Loans [Member] | Personal Loans [Member] | 90 or More Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 13 | 13 | ||
Total Other Loans [Member] | Personal Loans [Member] | Financial Asset, Past Due | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 48 | 48 | ||
Total Other Loans [Member] | Other Loans [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables, 90 or more days delinquent and accruing | 2 | 1 | ||
Loan receivables, total non-accruing | [1] | 17 | 16 | |
Loan receivables | [4] | 2,470 | 2,266 | |
Total Other Loans [Member] | Other Loans [Member] | 30-89 Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 7 | 7 | ||
Total Other Loans [Member] | Other Loans [Member] | 90 or More Days Delinquent [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | 9 | 7 | ||
Total Other Loans [Member] | Other Loans [Member] | Financial Asset, Past Due | ||||
Financing Receivable, Past Due [Line Items] | ||||
Loan receivables | $ 16 | $ 14 | ||
[1] | The Company estimates that the gross interest income that would have been recorded under the original terms of non-accruing credit card loans was $6 million and $8 million for the three months ended March 31, 2022 and 2021, respectively. The Company does not separately track the amount of gross interest income that would have been recorded under the original terms of loans. Instead, the Company estimated this amount based on customers' current balances and most recent interest rates. | |||
[2] | Amounts include carrying values of $10.7 billion and $13.3 billion underlying investors' interest in trust debt at March 31, 2022 and December 31, 2021, respectively, and $13.3 billion and $11.9 billion in seller's interest at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. | |||
[3] | Unbilled accrued interest receivable on credit card loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $424 million and $423 million at March 31, 2022 and December 31, 2021, respectively. | |||
[4] | Accrued interest receivable on private student, personal and other loans, which is presented as part of other assets in the Company's condensed consolidated statements of financial condition, was $457 million, $41 million and $6 million, respectively, at March 31, 2022 and $443 million, $42 million and $6 million, respectively, at December 31, 2021. | |||
[5] | Amounts include carrying values of $196 million and $207 million in loans pledged as collateral against the note issued from a private student loan securitization trust at March 31, 2022 and December 31, 2021, respectively. See Note 4: Credit Card and Private Student Loan Securitization Activities for additional information. | |||
[6] | Private student loans may include a deferment period, during which borrowers are not required to make payments while enrolled in school at least half time as determined by the school. During a deferment period, these loans do not advance into delinquency. |
Loan Receivables (Schedule of_4
Loan Receivables (Schedule of Loans That Entered a Modification Program During the Period) (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)accounts | Mar. 31, 2021USD ($)accounts | ||
Credit Card Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts that entered a TDR program during the period and were converted from revolving line-of-credit arrangements to term loans, balances | $ 75 | $ 128 | |
Credit Card Loans [Member] | Credit Card Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts that entered a TDR program during the period, number of accounts (in accounts) | accounts | [1] | 54,511 | 20,702 |
Accounts that entered a TDR program during the period, balances | [1] | $ 344 | $ 135 |
Total Other Loans [Member] | Private Student Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts that entered a TDR program during the period, number of accounts (in accounts) | accounts | 1,755 | 126 | |
Accounts that entered a TDR program during the period, balances | $ 31 | $ 2 | |
Total Other Loans [Member] | Personal Loans [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts that entered a TDR program during the period, number of accounts (in accounts) | accounts | 1,159 | 1,390 | |
Accounts that entered a TDR program during the period, balances | $ 15 | $ 17 | |
[1] | Accounts that entered a credit card TDR program include $75 million and $128 million that were converted from revolving line-of-credit arrangements to term loans during the three months ended March 31, 2022 and 2021, respectively. |
Loan Receivables (Schedule of T
Loan Receivables (Schedule of Troubled Debt Restructurings That Subsequently Defaulted) (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)accountsmissed_payments | Mar. 31, 2021USD ($)accounts | ||
Credit Card Loans [Member] | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Amount of missed payments after which a customer defaults from a TDR program (in payments) | missed_payments | 2 | ||
Credit Card Loans [Member] | Credit Card Loans [Member] | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs that subsequently defaulted, number of accounts (in accounts) | accounts | [1],[2] | 4,535 | 6,001 |
TDRs that subsequently defaulted, aggregated outstanding balances upon default | $ | [1],[2] | $ 23 | $ 36 |
Total Other Loans [Member] | Private Student Loans [Member] | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs that subsequently defaulted, number of accounts (in accounts) | accounts | [3] | 106 | 66 |
TDRs that subsequently defaulted, aggregated outstanding balances upon default | $ | [3] | $ 2 | $ 2 |
Delinquency days to default (in days) | 60 days | ||
Total Other Loans [Member] | Personal Loans [Member] | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
TDRs that subsequently defaulted, number of accounts (in accounts) | accounts | [1] | 261 | 527 |
TDRs that subsequently defaulted, aggregated outstanding balances upon default | $ | [1] | $ 3 | $ 7 |
Amount of missed payments after which a customer defaults from a TDR program (in payments) | missed_payments | 2 | ||
[1] | For credit card loans and personal loans, a customer defaults from a loan modification program after either two consecutive missed payments or at charge-off, depending on the program. The outstanding balance upon default is generally the loan balance at the end of the month prior to default. | ||
[2] | For credit card loans that default from a temporary loan modification program, accounts revert back to the pre-modification terms and charging privileges remain suspended in most cases. | ||
[3] | For student loans, a customer defaults from a loan modification after they are 60 or more days delinquent. The outstanding balance upon default is generally the loan balance at the end of the month prior to default |
Credit Card and Private Stude_3
Credit Card and Private Student Loan Securitization Activities (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2022classes | |
Variable Interest Entity, Primary Beneficiary [Member] | Discover Card Execution Note Trust [Member] | Credit Card Securitization Trusts [Member] | |
Variable Interest Entity [Line Items] | |
Number of classes of securities in debt structure (in classes) | 4 |
Credit Card and Private Stude_4
Credit Card and Private Student Loan Securitization Activities (Schedule of Restricted Credit Card Securitized Assets) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Variable Interest Entity [Line Items] | |||||
Restricted cash | $ 18 | $ 2,582 | $ 326 | ||
Loan receivables | 93,471 | 93,684 | |||
Allowance for credit losses allocated to securitized loan receivables | (6,647) | (6,822) | $ (7,347) | $ (8,226) | |
Net loan receivables | 86,824 | 86,862 | |||
Other assets | 3,729 | 3,906 | |||
Total assets | 107,412 | 110,242 | |||
Variable Interest Entity, Primary Beneficiary [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Restricted cash | 18 | 2,582 | |||
Loan receivables | 24,231 | 25,449 | |||
Allowance for credit losses allocated to securitized loan receivables | (1,231) | (1,371) | |||
Other assets | 4 | 4 | |||
Variable Interest Entity, Primary Beneficiary [Member] | Credit Card Securitization Trusts [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Restricted cash | 9 | 2,574 | |||
Investors' interests held by third-party investors | 7,625 | 9,425 | |||
Investors' interests held by wholly owned subsidiaries of Discover Bank | 3,102 | 3,899 | |||
Seller's interest | 13,308 | 11,918 | |||
Loan receivables | [1] | 24,035 | 25,242 | ||
Allowance for credit losses allocated to securitized loan receivables | [1] | (1,231) | (1,371) | ||
Net loan receivables | 22,804 | 23,871 | |||
Other assets | 3 | 3 | |||
Total assets | $ 22,816 | $ 26,448 | |||
[1] | The Company maintains its allowance for credit losses at an amount equal to lifetime expected credit losses associated with all loan receivables, which includes all loan receivables in the trusts. Therefore, the credit risk associated with the transferred receivables is fully reflected on the Company's statements of financial condition in accordance with GAAP. |
Credit Card and Private Stude_5
Credit Card and Private Student Loan Securitization Activities (Schedule of Restricted Student Loan Securitized Assets) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Variable Interest Entity [Line Items] | |||
Restricted cash | $ 18 | $ 2,582 | $ 326 |
Loan receivables | 93,471 | 93,684 | |
Total assets | 107,412 | 110,242 | |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Variable Interest Entity [Line Items] | |||
Restricted cash | 18 | 2,582 | |
Loan receivables | 24,231 | 25,449 | |
Variable Interest Entity, Primary Beneficiary [Member] | Private Student Loan Securitization Trusts [Member] | |||
Variable Interest Entity [Line Items] | |||
Restricted cash | 9 | 8 | |
Loan receivables | 196 | 207 | |
Total assets | $ 205 | $ 215 |
Deposits (Narrative) (Details)
Deposits (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2022channels | |
Deposits [Abstract] | |
Deposits source channels (in number of channels) | 2 |
Deposits (Schedule of Certifica
Deposits (Schedule of Certificates of Deposit Maturities) (Details) $ in Millions | Mar. 31, 2022USD ($) |
Deposits [Abstract] | |
2022 | $ 9,586 |
2023 | 4,851 |
2024 | 1,669 |
2025 | 904 |
2026 | 864 |
Thereafter | 789 |
Total | $ 18,663 |
Long-Term Borrowings (Narrative
Long-Term Borrowings (Narrative) (Details) - USD ($) $ in Billions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Federal Home Loan Bank, advances, general debt obligations, maximum amount available | $ 1.5 | $ 1.4 |
Federal Home Loan Bank advances | 0 | 1.3 |
Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Securitized Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total commitment of secured credit facilities | 3.8 | 4 |
Total used commitment of secured credit facilities | $ 0 | $ 0.5 |
Long-Term Borrowings (Schedule
Long-Term Borrowings (Schedule of Long-Term Borrowings and Weighted Average Interest Rates) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | ||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 17,132 | $ 18,477 | |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | 7,715 | 9,539 | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 7,617 | 8,935 | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Fixed-Rate Asset-Backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [1] | 1.70% | |
Long-term borrowings (in dollars) | [1] | $ 5,019 | 5,588 |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Fixed-Rate Asset-Backed Securities [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 0.58% | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Fixed-Rate Asset-Backed Securities [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 3.03% | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [2] | 0.84% | |
Long-term borrowings (in dollars) | [2] | $ 2,598 | 3,347 |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [2] | 0.73% | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [2] | 1.00% | |
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | 1-Month LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate terms | 1-month LIBOR + 33 to 60 basis points | ||
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | 1-Month LIBOR [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.33% | ||
Securitized Debt [Member] | Discover Card Master Trust I and Discover Card Execution Note Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | 1-Month LIBOR [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.60% | ||
Securitized Debt [Member] | Student Loan Trust [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 98 | 104 | |
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [3],[4] | 4.50% | |
Long-term borrowings (in dollars) | [3],[4] | $ 98 | 104 |
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [3],[4] | 4.50% | |
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [3],[4] | 4.50% | |
Securitized Debt [Member] | Student Loan Trust [Member] | Floating-Rate Asset-Backed Securities [Member] | Prime Rate [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate terms | Prime rate + 100 basis points | ||
Basis spread on variable rate | 1.00% | ||
Securitized Debt [Member] | Variable Interest Entity, Primary Beneficiary [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings (in dollars) | $ 7,715 | 9,039 | |
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | 4.17% | ||
Long-term borrowings (in dollars) | $ 3,394 | 3,382 | |
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Senior Notes [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 3.75% | ||
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Senior Notes [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.20% | ||
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Retail Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | 3.75% | ||
Long-term borrowings (in dollars) | $ 166 | 166 | |
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Retail Notes [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.85% | ||
Corporate Debt Securities [Member] | Parent Company [Member] | Fixed-Rate Retail Notes [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.40% | ||
Senior Notes [Member] | Discover Bank [Member] | Fixed-Rate Senior Bank Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [1] | 3.63% | |
Long-term borrowings (in dollars) | [1] | $ 5,362 | 5,385 |
Senior Notes [Member] | Discover Bank [Member] | Fixed-Rate Senior Bank Notes [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 2.45% | |
Senior Notes [Member] | Discover Bank [Member] | Fixed-Rate Senior Bank Notes [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 4.65% | |
Subordinated Debt [Member] | Discover Bank [Member] | Fixed-Rate Subordinated Bank Notes [Member] | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate | [1] | 4.68% | |
Long-term borrowings (in dollars) | [1] | $ 495 | $ 505 |
Subordinated Debt [Member] | Discover Bank [Member] | Fixed-Rate Subordinated Bank Notes [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 4.68% | |
Subordinated Debt [Member] | Discover Bank [Member] | Fixed-Rate Subordinated Bank Notes [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | [1] | 4.68% | |
[1] | The Company uses interest rate swaps to hedge portions of these long-term borrowings against changes in fair value attributable to changes in the London Interbank Offered Rate ("LIBOR") or Overnight Index Swap ("OIS") rates. The use of these interest rate swaps impacts the carrying value of the debt. See Note 15: Derivatives and Hedging Activities. | ||
[2] | DCENT floating-rate asset-backed securities include issuances with the following interest rate terms: 1-month LIBOR + 33 to 60 basis points as of March 31, 2022. | ||
[3] | Repayment of this debt is dependent upon the timing of principal and interest payments on the underlying private student loans. The date shown represents the final maturity date. | ||
[4] | The private student loan securitization trust floating-rate asset-backed security includes an issuance with the following interest rate term: Prime rate + 100 basis points as of March 31, 2022. |
Long-Term Borrowings (Schedul_2
Long-Term Borrowings (Schedule of Long-Term Borrowings Maturities) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2022 | $ 2,638 | |
2023 | 3,295 | |
2024 | 3,731 | |
2025 | 1,775 | |
2026 | 2,666 | |
Thereafter | 3,027 | |
Total | $ 17,132 | $ 18,477 |
Preferred Stock (Schedule of St
Preferred Stock (Schedule of Stock by Class) (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 22, 2020 | Oct. 31, 2017 | Mar. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | $ 1,056 | $ 1,056 | |||
Preferred stock, par or stated value per share | $ 0.01 | $ 0.01 | |||
Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, earliest redemption date | Oct. 30, 2027 | ||||
Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, depositary shares issued (in number of depositary shares) | 1,070,000 | 1,070,000 | |||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | $ 1,056 | $ 1,056 | |||
Preferred Stock [Member] | Series C Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, initial issue date | [1] | Oct. 31, 2017 | |||
Preferred stock, liquidation preference per share | [1],[2],[3] | $ 1,000 | |||
Preferred stock, redemption price per share | [1],[2],[3] | $ 1,000 | |||
Preferred Stock, Dividend Rate, Percentage | [1],[4] | 5.50% | |||
Preferred stock, depositary shares issued (in number of depositary shares) | [1] | 570,000 | 570,000 | ||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | [1] | $ 563 | $ 563 | ||
Depositary shares represented by one preferred share | 100 | ||||
Preferred stock, par or stated value per share | $ 0.01 | ||||
Redemption period of preferred stock following regulatory capital treatment event | 90 days | ||||
Preferred stock dividend payment rate variable, rate to be used in future periods | 3-month LIBOR | ||||
Preferred Stock [Member] | Series C Preferred Stock [Member] | Three-Month London Interbank Offered Rate (LIBOR) | |||||
Class of Stock [Line Items] | |||||
Preferred stock basis spread on variable rate, rate to be used in future periods | 3.076% | ||||
Preferred Stock [Member] | Series D Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred stock, initial issue date | [1] | Jun. 22, 2020 | |||
Preferred stock, liquidation preference per share | [1],[3],[5] | $ 1,000 | |||
Preferred stock, redemption price per share | [1],[3],[5] | $ 1,000 | |||
Preferred Stock, Dividend Rate, Percentage | [1],[6] | 6.125% | |||
Preferred stock, depositary shares issued (in number of depositary shares) | [1] | 500,000 | 500,000 | ||
Preferred stock, par value $0.01 per share; 200,000,000 shares authorized; 10,700 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | [1] | $ 493 | $ 493 | ||
Depositary shares represented by one preferred share | 100 | ||||
Preferred stock, par or stated value per share | $ 0.01 | ||||
Redemption period of preferred stock following regulatory capital treatment event | 90 days | ||||
Preferred stock dividend payment rate variable, rate to be used in future periods | 5-year Treasury | ||||
Dividend rate reset | 5 years | ||||
Preferred Stock [Member] | Series D Preferred Stock | Five-Year Treasury Rate | |||||
Class of Stock [Line Items] | |||||
Preferred stock basis spread on variable rate, rate to be used in future periods | 5.783% | ||||
[1] | Issued as depositary shares, each representing 1/100 th interest in a share of the corresponding series of preferred stock. Each preferred share has a par value of $0.01. | ||||
[2] | Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part on any dividend payment date on or after October 30, 2027, or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series C preferred stock). | ||||
[3] | Redeemable at the redemption price plus declared and unpaid dividends. | ||||
[4] | Any dividends declared are payable semi-annually in arrears at a rate of 5.50% per annum until October 30, 2027. Thereafter, dividends declared will be payable quarterly in arrears at a floating rate equal to 3-month LIBOR plus a spread of 3.076% per annum. | ||||
[5] | Redeemable at the Company’s option, subject to regulatory approval, either (i) in whole or in part during the three-month period prior to, and including, each reset date (as defined in the certificate of designations for the Series D preferred stock) or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the certificate of designations for the Series D Preferred Stock). | ||||
[6] | Any dividends declared are payable semi-annually in arrears at a rate of 6.125% per annum until September 23, 2025, after which the dividend rate will reset every five years to a fixed annual rate equal to the 5-year Treasury plus a spread of 5.783%. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Schedule of Changes in Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | $ (94) | |
Net change in accumulated other comprehensive income (loss), net of tax | (119) | $ (52) |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (213) | |
Unrealized Gains (Losses) on Available-for-Sale Investment Securities, Net of Tax [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | 114 | 284 |
Net change in accumulated other comprehensive income (loss), net of tax | (121) | (53) |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (7) | 231 |
Gains (Losses) on Cash Flow Hedges, Net of Tax [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | (9) | (12) |
Net change in accumulated other comprehensive income (loss), net of tax | 2 | 1 |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (7) | (11) |
Gains (Losses) on Pension Plan, Net of Tax [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | (199) | (227) |
Net change in accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | (199) | (227) |
AOCI | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Accumulated other comprehensive income (loss), net of tax, balance at beginning of period | (94) | 45 |
Net change in accumulated other comprehensive income (loss), net of tax | (119) | (52) |
Accumulated other comprehensive income (loss), net of tax, balance at end of period | $ (213) | $ (7) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Schedule of Other Comprehensive Income Before Reclassifications and Amounts Reclassified from AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Available-for-sale investment securities, net unrealized holding gains (losses) arising during the period, before tax | $ (160) | $ (71) |
Available-for-sale investment securities, net unrealized holding gains (losses) arising during the period, tax benefit (expense) | 39 | 18 |
Available-for-sale investment securities, net unrealized holding gains (losses) arising during the period, net of tax | (121) | (53) |
Available-for-sale investment securities, net change, before tax | (160) | (71) |
Available-for-sale investment securities, net change, tax benefit (expense) | 39 | 18 |
Available-for-sale investment securities, net change, net of tax | (121) | (53) |
Cash flow hedges, net unrealized gains (losses) arising during the period, before tax | (1) | |
Cash flow hedges, net unrealized gains (losses) arising during the period, tax benefit (expense) | 0 | |
Cash flow hedges, net unrealized gains (losses) arising during the period, net of tax | (1) | |
Cash flow hedges, amounts reclassified from AOCI, before tax | 1 | 1 |
Cash flow hedges, amounts reclassified from AOCI, tax benefit (expense) | 2 | 0 |
Cash flow hedges, amounts reclassified from AOCI, net of tax | 3 | 1 |
Cash flow hedges, net change, before tax | 0 | 1 |
Cash flow hedges, net change, tax benefit (expense) | 2 | 0 |
Cash flow hedges, net change, net of tax | $ 2 | $ 1 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Income Tax Disclosure [Abstract] | |
Increase (decrease) in income tax expense/benefit, amount | $ (110) |
Income Taxes (Schedule of Effec
Income Taxes (Schedule of Effective Income Tax Rate Calculation) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 1,618 | $ 2,079 |
Income tax expense | $ 376 | $ 486 |
Effective income tax rate (in percent) | 23.30% | 23.40% |
Earnings Per Share (Schedule of
Earnings Per Share (Schedule of Basic and Diluted EPS ) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income | $ 1,242 | $ 1,593 |
Preferred stock dividends, income statement impact | (31) | (39) |
Net income available to common stockholders | 1,211 | 1,554 |
Undistributed earnings (loss) allocated to participating securities, basic | (6) | (8) |
Net income allocated to common stockholders | 1,205 | 1,546 |
Net income (loss) available to common stockholders, diluted | $ 1,205 | $ 1,546 |
Denominator: | ||
Weighted-average shares of common stock outstanding | 285 | 307 |
Weighted-average shares of common stock outstanding and common stock equivalents | 285 | 307 |
Basic earnings per common share (in dollars per share) | $ 4.23 | $ 5.04 |
Diluted earnings per common share (in dollars per share) | $ 4.22 | $ 5.04 |
Capital Adequacy (Schedule of M
Capital Adequacy (Schedule of Minimum and Well-Capitalized Requirements) (Details) $ in Millions | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | |
Parent Company [Member] | |||
Compliance with Regulatory Capital Requirements [Line Items] | |||
Total capital to risk-weighted assets, actual amount | $ 16,724 | $ 17,150 | |
Total capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.176 | 0.176 |
Total capital to risk-weighted assets, minimum capital requirements, amount | $ 7,585 | $ 7,775 | |
Total capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.080 | 0.080 | |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 9,481 | $ 9,719 |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.100 | 0.100 |
Tier I capital to risk-weighted assets, actual amount | $ 15,002 | $ 15,395 | |
Tier I capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.158 | 0.158 |
Tier I capital to risk-weighted assets, minimum capital requirements, amount | $ 5,689 | $ 5,831 | |
Tier I capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.060 | 0.060 | |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 5,689 | $ 5,831 |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.060 | 0.060 |
Tier I capital to average assets, actual amount | $ 15,002 | $ 15,395 | |
Tier I capital to average assets, actual ratio (in percent) | [1] | 0.137 | 0.139 |
Tier I capital to average assets, minimum capital requirements, amount | $ 4,367 | $ 4,432 | |
Tier I capital to average assets, minimum capital requirements, ratio (in percent) | 0.040 | 0.040 | |
CET1 capital to risk-weighted assets, actual amount | $ 13,946 | $ 14,339 | |
CET1 capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.147 | 0.148 |
CET1 capital to risk-weighted assets, minimum capital requirements, amount | $ 4,266 | $ 4,373 | |
CET1 capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 4.50% | 4.50% | |
Discover Bank [Member] | |||
Compliance with Regulatory Capital Requirements [Line Items] | |||
Total capital to risk-weighted assets, actual amount | $ 15,647 | $ 15,957 | |
Total capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.167 | 0.169 |
Total capital to risk-weighted assets, minimum capital requirements, amount | $ 7,475 | $ 7,573 | |
Total capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.080 | 0.080 | |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 9,344 | $ 9,466 |
Total capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.100 | 0.100 |
Tier I capital to risk-weighted assets, actual amount | $ 13,741 | $ 13,932 | |
Tier I capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.147 | 0.147 |
Tier I capital to risk-weighted assets, minimum capital requirements, amount | $ 5,607 | $ 5,680 | |
Tier I capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 0.060 | 0.060 | |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 7,475 | $ 7,573 |
Tier I capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.080 | 0.080 |
Tier I capital to average assets, actual amount | $ 13,741 | $ 13,932 | |
Tier I capital to average assets, actual ratio (in percent) | [1] | 0.128 | 0.128 |
Tier I capital to average assets, minimum capital requirements, amount | $ 4,309 | $ 4,365 | |
Tier I capital to average assets, minimum capital requirements, ratio (in percent) | 0.040 | 0.040 | |
Tier I capital to average assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 5,386 | $ 5,456 |
Tier I capital to average assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 0.050 | 0.050 |
CET1 capital to risk-weighted assets, actual amount | $ 13,741 | $ 13,932 | |
CET1 capital to risk-weighted assets, actual ratio (in percent) | [1] | 0.147 | 0.147 |
CET1 capital to risk-weighted assets, minimum capital requirements, amount | $ 4,205 | $ 4,260 | |
CET1 capital to risk-weighted assets, minimum capital requirements, ratio (in percent) | 4.50% | 4.50% | |
CET1 capital to risk-weighted assets, capital requirements to be classified as well-capitalized, amount | [2] | $ 6,074 | $ 6,153 |
CET1 capital to risk-weighted assets, capital requirements to be classified as well-capitalized, ratio (in percent) | [2] | 6.50% | 6.50% |
[1] | Capital ratios are calculated based on the Basel III standardized approach rules, subject to applicable transition provisions, including CECL transition provisions. | ||
[2] | The Basel III rules do not establish well-capitalized thresholds for these measures for bank holding companies. Existing well-capitalized thresholds established in the Federal Reserve's Regulation Y have been included where available. |
Commitments, Contingencies an_3
Commitments, Contingencies and Guarantees (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Commitments, Contingencies and Guarantees [Line Items] | ||
Guarantor obligations, maximum exposure, undiscounted | $ 90 | |
Contingent liabilities related to equity method investments | 0 | |
Escrow deposits and settlement withholdings | 10 | $ 15 |
Commitments to Extend Credit [Member] | ||
Commitments, Contingencies and Guarantees [Line Items] | ||
Unused commitments to extend credit for loans | $ 222,300 |
Commitments, Contingencies an_4
Commitments, Contingencies and Guarantees (Schedule of Maximum Potential Counterparty Exposures Related to Settlement Guarantees and Merchant Chargeback Guarantee) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Merchant Chargeback Guarantees [Member] | |||
Loss Contingencies [Line Items] | |||
Aggregate sales transaction volume | [1] | $ 57,153 | $ 47,487 |
[1] | Represents transactions processed on the Discover Network for which a potential liability exists that, in aggregate, can differ from credit card sales volume. |
Litigation and Regulatory Mat_2
Litigation and Regulatory Matters (Narrative) (Details) - USD ($) $ in Millions | Dec. 22, 2020 | Mar. 31, 2022 |
Unfavorable Regulatory Action [Member] | Consumer Financial Protection Bureau Consent Order [Member] | ||
Loss Contingencies [Line Items] | ||
Amount of civil money penalty for consent order | $ 25 | |
Maximum [Member] | Pending and Threatened Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Loss contingency, range of possible loss, portion not accrued | $ 190 | |
Minimum [Member] | Unfavorable Regulatory Action [Member] | Consumer Financial Protection Bureau Consent Order [Member] | ||
Loss Contingencies [Line Items] | ||
Loss contingency, estimate of possible loss | $ 10 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Fair Value, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Goodwill and Intangible Asset Impairment | $ 0 | $ 0 |
Residential Mortgage-Backed Securities - Agency [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale securities, par value | $ 160 | |
Available for sale securities, weighted average coupon rate (in percent) | 3.24% | |
Available for sale securities, weighted average remaining maturity (in years) | 2 years |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | [1] | $ 5,772 | $ 6,700 | |
US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | [1] | 5,612 | 6,514 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | [1] | 160 | [2] | 186 |
Fair Value, Recurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 5,772 | 6,700 | ||
Fair value of payment services equity investments with readily determinable fair values | 272 | 461 | ||
Fair Value, Recurring [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 5,612 | 6,514 | ||
Fair Value, Recurring [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 160 | 186 | ||
Fair Value, Recurring [Member] | Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 5,604 | 6,505 | ||
Fair value of payment services equity investments with readily determinable fair values | 272 | 461 | ||
Fair Value, Recurring [Member] | Level 1 [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 5,604 | 6,505 | ||
Fair Value, Recurring [Member] | Level 1 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 168 | 195 | ||
Fair value of payment services equity investments with readily determinable fair values | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 2 [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 8 | 9 | ||
Fair Value, Recurring [Member] | Level 2 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 160 | 186 | ||
Fair Value, Recurring [Member] | Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 0 | 0 | ||
Fair value of payment services equity investments with readily determinable fair values | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 3 [Member] | US Treasury and Government | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | 0 | 0 | ||
Fair Value, Recurring [Member] | Level 3 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Available-for-sale investment securities, fair value | $ 0 | $ 0 | ||
[1] | Available-for-sale investment securities are reported at fair value. | |||
[2] | Maturities of RMBS are reflective of the contractual maturities of the investment. |
Fair Value Measurements (Sche_2
Fair Value Measurements (Schedule of Financial Instruments Measured at Other Than Fair Value) (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | ||
Estimated Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | $ 198 | $ 206 | ||
Net loan receivables | 93,725 | 94,176 | ||
Cash and cash equivalents | [1] | 9,625 | 8,750 | |
Restricted cash | [1] | 18 | 2,582 | |
Accrued interest receivables | [1],[2] | 956 | 948 | |
Time deposits | [3] | 18,843 | 21,490 | |
Short-term debt, fair value | 1,750 | |||
Long-term borrowings | 17,130 | 19,070 | ||
Accrued interest payables | [1],[2] | 108 | 184 | |
Estimated Fair Value [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 7,609 | 9,057 | ||
Estimated Fair Value [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 9,521 | 10,013 | ||
Estimated Fair Value [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 198 | 206 | ||
Estimated Fair Value [Member] | Level 1 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Net loan receivables | 0 | 0 | ||
Cash and cash equivalents | [1] | 9,625 | 8,750 | |
Restricted cash | [1] | 18 | 2,582 | |
Accrued interest receivables | [1],[2] | 0 | 0 | |
Time deposits | [3] | 0 | 0 | |
Short-term debt, fair value | 0 | |||
Long-term borrowings | 0 | 0 | ||
Accrued interest payables | [1],[2] | 0 | 0 | |
Estimated Fair Value [Member] | Level 1 [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 0 | 0 | ||
Estimated Fair Value [Member] | Level 1 [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 0 | 0 | ||
Estimated Fair Value [Member] | Level 1 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Estimated Fair Value [Member] | Level 2 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 198 | 206 | ||
Net loan receivables | 0 | 0 | ||
Cash and cash equivalents | [1] | 0 | 0 | |
Restricted cash | [1] | 0 | 0 | |
Accrued interest receivables | [1],[2] | 956 | 948 | |
Time deposits | [3] | 18,843 | 21,490 | |
Short-term debt, fair value | 1,750 | |||
Long-term borrowings | 17,032 | 18,966 | ||
Accrued interest payables | [1],[2] | 108 | 184 | |
Estimated Fair Value [Member] | Level 2 [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 7,511 | 8,953 | ||
Estimated Fair Value [Member] | Level 2 [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 9,521 | 10,013 | ||
Estimated Fair Value [Member] | Level 2 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 198 | 206 | ||
Estimated Fair Value [Member] | Level 3 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Net loan receivables | 93,725 | 94,176 | ||
Cash and cash equivalents | [1] | 0 | 0 | |
Restricted cash | [1] | 0 | 0 | |
Accrued interest receivables | [1],[2] | 0 | 0 | |
Time deposits | [3] | 0 | 0 | |
Short-term debt, fair value | 0 | |||
Long-term borrowings | 98 | 104 | ||
Accrued interest payables | [1],[2] | 0 | 0 | |
Estimated Fair Value [Member] | Level 3 [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 98 | 104 | ||
Estimated Fair Value [Member] | Level 3 [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 0 | 0 | ||
Estimated Fair Value [Member] | Level 3 [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 0 | 0 | ||
Carrying Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 205 | 204 | ||
Net loan receivables | 86,824 | 86,862 | ||
Cash and cash equivalents | [1] | 9,625 | 8,750 | |
Restricted cash | [1] | 18 | 2,582 | |
Accrued interest receivables | [1],[2] | 956 | 948 | |
Time deposits | [3] | 18,663 | 21,125 | |
Short-term debt, fair value | 1,750 | |||
Long-term borrowings | 17,132 | 18,477 | ||
Accrued interest payables | [1],[2] | 108 | 184 | |
Carrying Value [Member] | Variable Interest Entity, Primary Beneficiary [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 7,715 | 9,039 | ||
Carrying Value [Member] | Consolidated Entity Excluding Variable Interest Entities (VIE) [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term borrowings | 9,417 | 9,438 | ||
Carrying Value [Member] | Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | 205 | 204 | ||
Held-to-maturity investment securities | [4] | 198 | 206 | |
Residential Mortgage-Backed Securities - Agency [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Held-to-maturity investment securities | [4],[5] | $ 198 | [6] | $ 206 |
[1] | The carrying values of these assets and liabilities approximate fair value due to their short-term nature. | |||
[2] | Accrued interest receivable and payable carrying values are presented as part of other assets or accrued expenses and other liabilities, respectively, in the Company's condensed consolidated statements of financial condition. | |||
[3] | Excludes deposits without contractually defined maturities for all periods presented. | |||
[4] | Held-to-maturity investment securities are reported at amortized cost. | |||
[5] | Amounts represent residential mortgage-backed securities ("RMBS") that were classified as held-to-maturity as they were entered into as a part of the Company's community reinvestment initiatives. | |||
[6] | Maturities of RMBS are reflective of the contractual maturities of the investment. |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Narrative) (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022USD ($)transactions | Dec. 31, 2021 | |
Derivative [Line Items] | ||
DerivativeNumberOfTerminatedInstrumentsAssociatedWithCashFlowHedgeGainLossToBeReclassifiedWithinTwelveMonths | transactions | 1 | |
Interest Income | ||
Derivative [Line Items] | ||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ | $ 5 | |
Financing Receivable [Member] | ||
Derivative [Line Items] | ||
Initial maximum period for cash flow hedges (in years) | 2 years | 2 years |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities (Schedule of Fair Value and Outstanding Notional Amounts of Derivative Instruments and Related Collateral Balances) (Details) € in Millions, ₨ in Millions, £ in Millions, $ in Millions, $ in Millions, $ in Millions | Mar. 31, 2022USD ($)transactions | Mar. 31, 2022EUR (€)transactions | Mar. 31, 2022GBP (£)transactions | Mar. 31, 2022SGD ($)transactions | Mar. 31, 2022INR (₨)transactions | Mar. 31, 2022AUD ($)transactions | Dec. 31, 2021USD ($) | Dec. 31, 2021EUR (€) | Dec. 31, 2021GBP (£) | Dec. 31, 2021SGD ($) | Dec. 31, 2021INR (₨) | Dec. 31, 2021AUD ($) | |
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative assets | [1],[2] | $ 0 | $ 0 | ||||||||||
Derivative liabilities | [1],[2] | 0 | 0 | ||||||||||
Collateral held, derivative assets | [2],[3] | 0 | 0 | ||||||||||
Collateral posted, derivative liabilities | [2],[3] | 0 | 0 | ||||||||||
Total net derivative assets | [2] | 0 | 0 | ||||||||||
Total net derivative liabilities | [2] | 0 | 0 | ||||||||||
Designated as Hedges [Member] | Cash Flow Hedging [Member] | Interest Rate Swaps [Member] | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | $ 250 | 250 | |||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 1 | 1 | 1 | 1 | 1 | 1 | |||||||
Derivative assets | [2] | $ 0 | 0 | ||||||||||
Derivative liabilities | [2] | 0 | 0 | ||||||||||
Designated as Hedges [Member] | Fair Value Hedging [Member] | Interest Rate Swaps [Member] | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | $ 3,425 | 6,125 | |||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 4 | 4 | 4 | 4 | 4 | 4 | |||||||
Derivative assets | [2] | $ 0 | 0 | ||||||||||
Derivative liabilities | [2] | 0 | 0 | ||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | [4] | $ 30 | 36 | ||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 7 | 7 | 7 | 7 | 7 | 7 | |||||||
Derivative assets | [2] | $ 0 | 0 | ||||||||||
Derivative liabilities | [2] | 0 | 0 | ||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | Euro Member Countries, Euro | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | € | € 6 | € 6 | |||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | United Kingdom, Pounds | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | £ | £ 6 | £ 6 | |||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | Singapore, Dollars | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | $ 1 | $ 1 | |||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | India, Rupees | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | ₨ | ₨ 788 | ₨ 788 | |||||||||||
Not Designated as Hedges [Member] | Foreign Exchange Forward [Member] | Australia, Dollars | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | $ 6 | $ 14 | |||||||||||
Not Designated as Hedges [Member] | When-Issued Forward Contracts [Member] | |||||||||||||
Derivatives, Fair Value [Line Items] | |||||||||||||
Derivative, notional amount | $ 36 | $ 50 | |||||||||||
Derivative, number of outstanding derivative contracts (in transactions) | transactions | 1 | 1 | 1 | 1 | 1 | 1 | |||||||
[1] | In addition to the derivatives disclosed in the table, the Company enters into forward contracts to purchase when-issued mortgage-backed securities as part of its community reinvestment initiatives. At March 31, 2022 and December 31, 2021, the Company had one outstanding contract with a total notional amount of $36 million and $50 million, respectively, and immaterial fair values. | ||||||||||||
[2] | The gross and net derivative assets and liabilities were immaterial as of March 31, 2022 and December 31, 2021. | ||||||||||||
[3] | Collateral amounts, which consist of cash and investment securities, are limited to the related derivative asset/liability balance and do not include excess collateral received/pledged. | ||||||||||||
[4] | The foreign exchange forward contracts have notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 6 million as of March 31, 2022, and notional amounts of EUR 6 million, GBP 6 million, SGD 1 million, INR 788 million and AUD 14 million as of December 31, 2021. |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities Derivatives and Hedging Activities (Schedule of Hedged Items in a Fair Value Hedging Relationship) (Details) - Long-term Debt [Member] - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule of Hedged Items in Fair Value Hedging Relationship [Line Items] | |||
Carrying amount of hedged assets/liabilities | $ 3,427 | $ 6,158 | |
Cumulative amount of fair value hedging adjustment increasing (decreasing) the carrying amount of hedged assets/liabilities | [1] | 31 | 83 |
Hedged Liability, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | $ 43 | $ 48 | |
[1] | The balance includes $43 million and $48 million of cumulative hedging adjustments related to discontinued hedging relationships as of March 31, 2022 and December 31, 2021, respectively. |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities (Schedule of Impact of the Derivative Instruments on Income) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amounts reclassified from OCI into earnings, cash flow hedges | $ (1) | $ (1) |
Interest Expense [Member] | Long-term Debt [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total amounts of income and expense line items presented in the condensed consolidated statements of income, where the effects of fair value or cash flow hedges are recorded | (117) | (123) |
Interest Expense [Member] | Long-term Debt [Member] | Designated as Hedges [Member] | Interest Rate Swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amounts reclassified from OCI into earnings, cash flow hedges | (1) | (1) |
Gains on hedged items, fair value hedges | 47 | 78 |
Losses on interest rate swaps, fair value hedges | (32) | (30) |
Total gains on fair value hedges | $ 15 | $ 48 |
Segment Disclosures (Narrative)
Segment Disclosures (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Segment Reporting [Abstract] | |
Number of reportable segments (in number of segments) | 2 |
Segment Disclosures (Schedule o
Segment Disclosures (Schedule of Segment Disclosures) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Interest income | $ 2,736 | $ 2,646 |
Interest expense | 257 | 316 |
Net interest income | 2,479 | 2,330 |
Provision for credit losses | 154 | (365) |
Other income (loss) | 423 | 465 |
Other expense | 1,130 | 1,081 |
Income before income taxes | 1,618 | 2,079 |
Credit Card Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 2,268 | 2,154 |
Total Other Loans [Member] | Private Student Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 190 | 185 |
Total Other Loans [Member] | Personal Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 206 | 224 |
Total Other Loans [Member] | Other Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 32 | 28 |
Unallocated Financing Receivables | Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 40 | 55 |
Operating Segments [Member] | Digital Banking [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 2,736 | 2,646 |
Interest expense | 257 | 316 |
Net interest income | 2,479 | 2,330 |
Provision for credit losses | 154 | (365) |
Other income (loss) | 486 | 379 |
Other expense | 1,092 | 1,047 |
Income before income taxes | 1,719 | 2,027 |
Operating Segments [Member] | Digital Banking [Member] | Credit Card Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 2,268 | 2,154 |
Operating Segments [Member] | Digital Banking [Member] | Total Other Loans [Member] | Private Student Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 190 | 185 |
Operating Segments [Member] | Digital Banking [Member] | Total Other Loans [Member] | Personal Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 206 | 224 |
Operating Segments [Member] | Digital Banking [Member] | Total Other Loans [Member] | Other Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 32 | 28 |
Operating Segments [Member] | Digital Banking [Member] | Unallocated Financing Receivables | Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 40 | 55 |
Operating Segments [Member] | Payment Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 0 | 0 |
Interest expense | 0 | 0 |
Net interest income | 0 | 0 |
Provision for credit losses | 0 | 0 |
Other income (loss) | (63) | 86 |
Other expense | 38 | 34 |
Income before income taxes | (101) | 52 |
Operating Segments [Member] | Payment Services [Member] | Credit Card Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 0 | 0 |
Operating Segments [Member] | Payment Services [Member] | Total Other Loans [Member] | Private Student Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 0 | 0 |
Operating Segments [Member] | Payment Services [Member] | Total Other Loans [Member] | Personal Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 0 | 0 |
Operating Segments [Member] | Payment Services [Member] | Total Other Loans [Member] | Other Loans [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | 0 | 0 |
Operating Segments [Member] | Payment Services [Member] | Unallocated Financing Receivables | Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Interest income | $ 0 | $ 0 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Schedule of Revenue from Contracts with Customers Disaggregated by Business Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Discount and interchange revenue, net | $ 320 | $ 241 | |
Protection products revenue | 44 | 43 | |
Transaction processing revenue | 57 | 51 | |
Other income subject to ASC 606 | 24 | 23 | |
Loan fee income | 140 | 107 | |
Unrealized (losses) gains on equity investments | (188) | 0 | |
Realized gains on equity investments | 26 | 0 | |
Total other income (loss) not subject to ASC 606 | (22) | 107 | |
Total other income (loss) by operating segment | 423 | 465 | |
Customer rewards included in discount and interchange revenue | 635 | 525 | |
Accounting Standards Update 2014-09 [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Discount and interchange revenue, net | [1] | 320 | 241 |
Protection products revenue | 44 | 43 | |
Transaction processing revenue | 57 | 51 | |
Other income subject to ASC 606 | 24 | 23 | |
Total other income subject to ASC 606 | [2] | 445 | 358 |
Operating Segments [Member] | Digital Banking [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Loan fee income | 140 | 107 | |
Unrealized (losses) gains on equity investments | 0 | ||
Realized gains on equity investments | 1 | ||
Total other income (loss) not subject to ASC 606 | 141 | 107 | |
Total other income (loss) by operating segment | 486 | 379 | |
Operating Segments [Member] | Digital Banking [Member] | Accounting Standards Update 2014-09 [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Discount and interchange revenue, net | [1] | 298 | 226 |
Protection products revenue | 44 | 43 | |
Transaction processing revenue | 0 | 0 | |
Other income subject to ASC 606 | 3 | 3 | |
Total other income subject to ASC 606 | [2] | 345 | 272 |
Operating Segments [Member] | Payment Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Loan fee income | 0 | 0 | |
Unrealized (losses) gains on equity investments | (188) | ||
Realized gains on equity investments | 25 | ||
Total other income (loss) not subject to ASC 606 | (163) | 0 | |
Total other income (loss) by operating segment | (63) | 86 | |
Operating Segments [Member] | Payment Services [Member] | Accounting Standards Update 2014-09 [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Discount and interchange revenue, net | [1] | 22 | 15 |
Protection products revenue | 0 | 0 | |
Transaction processing revenue | 57 | 51 | |
Other income subject to ASC 606 | 21 | 20 | |
Total other income subject to ASC 606 | [2] | $ 100 | $ 86 |
[1] | Net of rewards, including Cashback Bonus rewards, of $635 million and $525 million for the three months ended March 31, 2022 and 2021, respectively. | ||
[2] | Excludes deposit product fees that are reported within net interest income, which were immaterial for the three months ended March 31, 2022 and 2021. |