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Securitizations and Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2021

Summary of Select Information Related to VIEs

The following tables provide the classifications of assets and liabilities on the Company’s Condensed Consolidated Balance Sheets for its transactions with consolidated and unconsolidated VIEs at September 30, 2021 and December 31, 2020. Additionally, the assets and liabilities in the table below exclude intercompany balances that eliminate in consolidation:


September 30, 2021	Consolidated VIEs		Unconsolidated VIEs		Total
Assets

Restricted cash	$	14,827	$	—	$	14,827
Securities available for sale at fair value	—		73,694		73,694
Loans held for sale at fair value	55,172		—		55,172
Retail and certificate loans held for investment at fair value	15,388		—		15,388
Other loans held for investment at fair value	27,033		—		27,033
Other assets	649		19,732		20,381
Total assets	$	113,069	$	93,426	$	206,495
Liabilities
Retail notes, certificates and secured borrowings at fair value	$	15,388	$	—	$	15,388
Payable on Structured Program borrowings	89,252		—		89,252
Other liabilities	284		—		284
Total liabilities	104,924		—		104,924
Total net assets	$	8,145	$	93,426	$	101,571


December 31, 2020	Consolidated VIEs		Unconsolidated VIEs		Total
Assets
Restricted cash	$	15,983	$	—	$	15,983
Securities available for sale at fair value	—		142,026		142,026
Loans held for sale at fair value	98,190		—		98,190
Retail and certificate loans held for investment at fair value	52,620		—		52,620
Other loans held for investment at fair value	50,102		—		50,102
Other assets	1,270		32,865		34,135
Total assets	$	218,165	$	174,891	$	393,056
Liabilities

Retail notes, certificates and secured borrowings at fair value	$	52,620	$	—	$	52,620
Payable on Structured Program borrowings	152,808		—		152,808
Other liabilities	729		—		729
Total liabilities	206,157		—		206,157
Total net assets	$	12,008	$	174,891	$	186,899

The following tables present a summary of financial assets and liabilities from the Company’s involvement with consolidated VIEs at September 30, 2021 and December 31, 2020:


September 30, 2021	Assets		Liabilities		Net Assets
LC Trust	$	17,953	$	(15,505)	$	2,448
Consolidated trusts	95,116		(89,419)		5,697

Total consolidated VIEs	$	113,069	$	(104,924)	$	8,145


December 31, 2020	Assets		Liabilities		Net Assets
LC Trust	$	55,447	$	(53,068)	$	2,379
Consolidated trusts	162,460		(153,089)		9,371
Warehouse credit facility	258		—		258
Total consolidated VIEs	$	218,165	$	(206,157)	$	12,008

The following tables summarize unconsolidated VIEs with which the Company has significant continuing involvement, but is not the primary beneficiary at September 30, 2021 and December 31, 2020:


September 30, 2021			Carrying Value
	Total VIE Assets		Securities Available for Sale		Other Assets		Net Assets
Unconsolidated Trusts	$	763,992	$	31,253	$	5,517	$	36,770
Certificate Program	929,742		42,441		6,490		48,931
Investment Fund	37,533		—		7,725		7,725
Total unconsolidated VIEs	$	1,731,267	$	73,694	$	19,732	$	93,426


September 30, 2021	Maximum Exposure to Loss
	Securities Available for Sale		Other Assets		Net Assets
Unconsolidated Trusts	$	31,253	$	5,517	$	36,770
Certificate Program	42,441		6,490		48,931
Investment Fund	—		7,725		7,725
Total unconsolidated VIEs	$	73,694	$	19,732	$	93,426


December 31, 2020			Carrying Value
	Total VIE Assets		Securities Available for Sale		Other Assets		Net Assets
Unconsolidated Trusts	$	1,267,611	$	57,511	$	9,654	$	67,165
Certificate Program	1,931,429		84,515		15,436		99,951
Investment Fund	34,376		—		7,775		7,775
Total unconsolidated VIEs	$	3,233,416	$	142,026	$	32,865	$	174,891


December 31, 2020	Maximum Exposure to Loss
	Securities Available for Sale		Other Assets		Total Exposure
Unconsolidated Trusts	$	57,511	$	9,654	$	67,165
Certificate Program	84,515		15,436		99,951
Investment Fund	—		7,775		7,775
Total unconsolidated VIEs	$	142,026	$	32,865	$	174,891

Summary of Activity Related to Personal Whole Loan Securitizations

The following tables summarize activity related to the Unconsolidated Trusts and Certificate Program trusts, with the transfers accounted for as a sale on the Company’s financial statements for the third quarters and first nine months of 2021 and 2020:


Three Months Ended September 30,	2021				2020
	Unconsolidated Trusts		Unconsolidated Certificate Program Trusts			Unconsolidated Trusts		Unconsolidated Certificate Program Trusts
Principal derecognized from loans securitized or sold (1)	$	—	$	—		$	—	$	233,852
Net gains recognized from loans securitized or sold	$	—	$	—		$	—	$	1,563


Cash proceeds from servicing and other administrative fees on loans securitized or sold	$	2,021	$	3,131		$	4,176	$	6,697
Cash proceeds for interest received on senior securities and subordinated securities	$	377	$	598		$	983	$	1,847

(1) Includes non-cash purchase and sale of loans requested by investors to facilitate a Structured Program transaction during the third quarter of 2020.


Nine Months Ended September 30,	2021				2020
	Unconsolidated Trusts		Unconsolidated Certificate Program Trusts			Unconsolidated Trusts		Unconsolidated Certificate Program Trusts
Principal derecognized from loans securitized or sold (1)	$	—	$	—		$	255,203	$	871,489
Net gains (losses) recognized from loans securitized or sold	$	—	$	—		$	(20)	$	7,159
Fair value of asset-backed senior and subordinated securities, and CLUB Certificate asset-backed securities retained upon settlement (2)	$	—	$	—		$	12,707	$	31,423
Cash proceeds from loans securitized or sold	$	—	$	—		$	237,764	$	598,515
Cash proceeds from servicing and other administrative fees on loans securitized or sold	$	7,546	$	12,054		$	14,118	$	20,919
Cash proceeds for interest received on senior securities and subordinated securities	$	2,198	$	4,388		$	3,792	$	6,740

(1) Includes non-cash purchase and sale of loans requested by investors to facilitate a Structured Program transaction during the third quarter of 2020.

(2) For Structured Program transactions, the Company retained asset-backed senior securities of $23.0 million, CLUB Certificate asset-backed securities of $18.3 million, and asset-backed subordinated securities of $2.9 million for the first nine months of 2020. The Company did not retain asset-backed securities related to Structured Program transactions during the first nine months of 2021.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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