Securitizations and Variable Interest Entities

12 Months Ended

Dec. 31, 2023

Transfers and Servicing [Abstract]

Securitizations and Variable Interest Entities

Securitizations and Variable Interest Entities

For additional information regarding the consolidation of VIEs, see “Note 1. Summary of Significant Accounting Policies.”

VIE Assets and Liabilities

The following table presents the classifications of assets and liabilities on the Company’s Balance Sheet for its transactions with consolidated and unconsolidated VIEs. The Company’s transactions with VIEs include Structured Program transactions. The Company also has various forms of involvement with VIEs, including servicing loans and holding senior asset-backed securities or subordinated interests in the VIEs. Additionally, the carrying amount of assets and liabilities in the tables below exclude intercompany balances that were eliminated in consolidation.

	December 31, 2023						December 31, 2022
	Consolidated		Unconsolidated		Total		Consolidated		Unconsolidated		Total
Assets
Restricted cash	$	3,454	$	—	$	3,454	$	8,048	$	—	$	8,048
Securities available for sale at fair value	—		1,249,796		1,249,796		—		17,717		17,717
Loans held for investment at fair value	550		—		550		3,994		—		3,994
Retail and certificate loans held for investment at fair value	420		—		420		1,946		—		1,946
Other assets	14		31,531		31,545		206		10,464		10,670
Total assets	$	4,438	$	1,281,327	$	1,285,765	$	14,194	$	28,181	$	42,375
Liabilities
Borrowings	$	2,468	$	—	$	2,468	$	8,085	$	—	$	8,085
Retail notes and certificates	420		—		420		1,946		—		1,946
Other liabilities	4		3,301		3,305		29		—		29
Total liabilities	2,892		3,301		6,193		10,060		—		10,060
Total net assets (maximum loss exposure)	$	1,546	$	1,278,026	$	1,279,572	$	4,134	$	28,181	$	32,315

Maximum loss exposure represents estimated loss that would be incurred under severe, hypothetical circumstances, for which the Company believes the possibility is extremely remote, such as where the value of interests and any associated collateral declines to zero. Accordingly, this required disclosure is not an indication of expected losses.

Unconsolidated VIEs

The following table summarizes activity related to unconsolidated VIEs where the transfers were accounted for as a sale on the Company’s financial statements:

December 31,	2023		2022		2021
Fair value of consideration received:
Cash	$	172,397	$	5,320	$	—
Asset-backed securities retained	1,299,313		2,180		—
Other assets (liabilities)	16,740		(3,794)		—
Total consideration	1,488,450		3,706		—
Deconsolidation of debt	—		36,072		—
Fair value of loans sold	(1,474,077)		(39,519)		—
Gain on sales of loans (1)	$	14,373	$	259	$	—
Cash proceeds from continuing involvement:
Servicing and other administrative fees	$	5,475	$	8,618	$	23,586
Interest received on asset-backed securities retained	$	22,786	$	7,285	$	9,136

(1)    Consists primarily of servicing assets recognized at the time of sale, less any transaction costs, and excludes origination fees and fair value adjustments recognized prior to the sale. Prior period amounts have been reclassified to conform to the current period presentation.

Beginning in the second quarter of 2023, the Company resumed its Structured Program transactions with its newly launched Structured Certificates, where it retains the senior securities at a fixed rate, in addition to the amount required pursuant to the U.S. Risk Retention Rules, and sells the residual certificates. See “Note 5. Securities Available for Sale” for the securities retained in the Company’s investment portfolio related to such transactions.

There is no direct recourse to the Company’s assets, and holders of the securities can look only to those assets of the VIEs that issued their securities for payment. The residual certificates are subject principally to the credit and prepayment risk stemming from the underlying unsecured personal loans.

As of December 31, 2023, the aggregate unpaid principal balance held by unconsolidated VIEs was $1.6 billion, of which $9.5 million was attributable to off-balance sheet loans that were 30 days or more past due. As of December 31, 2022, the aggregate unpaid principal balance held by unconsolidated VIEs was $433.5 million, of which $14.9 million was attributable to off-balance sheet loans that were 30 days or more past due. For such loans, the Company would only experience a loss if it was required to repurchase a loan due to a breach in representations and warranties associated with its loan sale or servicing contracts.