Allowance for Finance Receivable Losses
Changes in the allowance for finance receivable losses by finance receivable type were as follows: | | | | | | | | | | | | | | | | | | | | | | (dollars in millions) | | Personal Loans | | SpringCastle Portfolio | | Real Estate Loans | | Retail Sales Finance | | Consolidated Total | | | | | | | | | | | | Year Ended December 31, 2016 | | | | | | | | | | | Balance at beginning of period | | $ | 541 |
| | $ | 4 |
| | $ | 46 |
| | $ | 1 |
| | $ | 592 |
| Provision for finance receivable losses | | 909 |
| | 14 |
| | 9 |
| | — |
| | 932 |
| Charge-offs | | (846 | ) | | (17 | ) | | (11 | ) | | (1 | ) | | (875 | ) | Recoveries | | 65 |
| | 3 |
| | 5 |
| | 1 |
| | 74 |
| Other (a) | | — |
| | (4 | ) | | (30 | ) | | — |
| | (34 | ) | Balance at end of period | | $ | 669 |
| | $ | — |
| | $ | 19 |
| | $ | 1 |
| | $ | 689 |
| | | | | | | | | | | | Year Ended December 31, 2015 | | | | | | | | | | | Balance at beginning of period | | $ | 132 |
| | $ | 3 |
| | $ | 46 |
| | $ | 1 |
| | $ | 182 |
| Provision for finance receivable losses | | 634 |
| | 67 |
| | 13 |
| | 2 |
| | 716 |
| Charge-offs | | (261 | ) | | (78 | ) | | (18 | ) | | (3 | ) | | (360 | ) | Recoveries | | 37 |
| | 12 |
| | 5 |
| | 1 |
| | 55 |
| Other (b) | | (1 | ) | | — |
| | — |
| | — |
| | (1 | ) | Balance at end of period | | $ | 541 |
| | $ | 4 |
| | $ | 46 |
| | $ | 1 |
| | $ | 592 |
| | | | | | | | | | | | Year Ended December 31, 2014 | | | | | | | | | | | Balance at beginning of period | | $ | 95 |
| | $ | 1 |
| | $ | 330 |
| | $ | 2 |
| | $ | 428 |
| Provision for finance receivable losses | | 205 |
| | 105 |
| | 110 |
| | 3 |
| | 423 |
| Charge-offs (c) | | (193 | ) | | (117 | ) | | (61 | ) | | (5 | ) | | (376 | ) | Recoveries (d) | | 25 |
| | 14 |
| | 6 |
| | 1 |
| | 46 |
| Other (e) | | — |
| | — |
| | (339 | ) | | — |
| | (339 | ) | Balance at end of period | | $ | 132 |
| | $ | 3 |
| | $ | 46 |
| | $ | 1 |
| | $ | 182 |
|
| | • | the elimination of allowance for finance receivable losses due to the sale of the SpringCastle Portfolio on March 31, 2016, in connection with the sale of our equity interest in the SpringCastle Joint Venture. See Note 2 for further information on this sale; and |
| | • | the elimination of allowance for finance receivable losses due to the transfers of real estate loans held for investment to finance receivable held for sale during 2016. |
| | (b) | Other consists of the elimination of allowance for finance receivable losses due to the transfer of personal loans held for investment to finance receivable held for sale during 2015. |
| | (c) | Charge-offs during 2014 included a $4 million reduction related to a change in recognizing charge-offs of unsecured loans of customers in bankruptcy status effective mid-November 2014. |
| | (d) | Recoveries during 2014 included $2 million of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March 2014. |
| | (e) | Other consists of the elimination of allowance for finance receivable losses due to the transfer of real estate loans held for investment to finance receivable held for sale during 2014. |
The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows: | | | | | | | | | | | | | | | | | | | | | | (dollars in millions) | | Personal Loans | | SpringCastle Portfolio | | Real Estate Loans | | Retail Sales Finance | | Total | | | | | | | | | | | | December 31, 2016 | | | | | | | | | | | Allowance for finance receivable losses: | | | | | | | | | | | Collectively evaluated for impairment | | $ | 571 |
| | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | 572 |
| Purchased credit impaired finance receivables | | 29 |
| | — |
| | 8 |
| | — |
| | 37 |
| TDR finance receivables | | 69 |
| | — |
| | 11 |
| | — |
| | 80 |
| Total | | $ | 669 |
| | $ | — |
| | $ | 19 |
| | $ | 1 |
| | $ | 689 |
| | | | | | | | | | | | Finance receivables: | | | | | | | | | | | Collectively evaluated for impairment | | $ | 13,072 |
| | $ | — |
| | $ | 76 |
| | $ | 11 |
| | $ | 13,159 |
| Purchased credit impaired finance receivables | | 353 |
| | — |
| | 24 |
| | — |
| | 377 |
| TDR finance receivables | | 152 |
| | — |
| | 44 |
| | — |
| | 196 |
| Total | | $ | 13,577 |
| | $ | — |
| | $ | 144 |
| | $ | 11 |
| | $ | 13,732 |
| | | | | | | | | | | | Allowance for finance receivable losses as a percentage of finance receivables | | 4.93 | % | | — | % | | 13.31 | % | | 4.42 | % | | 5.01 | % | | | | | | | | | | | | December 31, 2015 | | | | | | | | | | | Allowance for finance receivable losses: | | | | | | | | | | | Collectively evaluated for impairment | | $ | 524 |
| | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | 525 |
| Purchased credit impaired finance receivables | | — |
| | — |
| | 12 |
| | — |
| | 12 |
| TDR finance receivables | | 17 |
| | 4 |
| | 34 |
| | — |
| | 55 |
| Total | | $ | 541 |
| | $ | 4 |
| | $ | 46 |
| | $ | 1 |
| | $ | 592 |
| | | | | | | | | | | | Finance receivables: | | | | | | | | | | | Collectively evaluated for impairment | | $ | 12,599 |
| | $ | 1,340 |
| | $ | 387 |
| | $ | 23 |
| | $ | 14,349 |
| Purchased credit impaired finance receivables | | 652 |
| | 350 |
| | 42 |
| | — |
| | 1,044 |
| TDR finance receivables | | 44 |
| | 13 |
| | 109 |
| | — |
| | 166 |
| Total | | $ | 13,295 |
| | $ | 1,703 |
| | $ | 538 |
| | $ | 23 |
| | $ | 15,559 |
| | | | | | | | | | | | Allowance for finance receivable losses as a percentage of finance receivables | | 4.07 | % | | 0.25 | % | | 8.72 | % | | 3.46 | % | | 3.81 | % |
See Note 3 for additional information on the determination of the allowance for finance receivable losses.
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