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Loans and Interest Receivable (Tables)

9 Months Ended

Sep. 30, 2020

Delinquency status of the principal amount of loans and interest receivable

The following table presents the delinquency status of consumer loans and interest receivable at September 30, 2020 and December 31, 2019. Since our consumer loans are primarily revolving in nature, they are disclosed in the aggregate and not by year of origination. The amounts are based on the number of days past the billing date. The “current” category represents balances that are within 29 days of the billing date.


	September 30, 2020				December 31, 2019
	Amortized Cost Basis Revolving		Percent		Amortized Cost Basis Revolving		Percent
	(In millions, except percentages)
Current	$	1,593	98.2	%	$	1,279	96.7	%
30-59 days	11		0.7	%	15		1.1	%
60-89 days	6		0.4	%	9		0.7	%
90-179 days	12		0.7	%	19		1.5	%
Total consumer loans and interest receivable(1), (2), (3)	$	1,622	100.0	%	$	1,322	100.0	%

(1) Excludes receivables from other consumer credit products of $57 million and $92 million at September 30, 2020 and December 31, 2019, respectively.

(2) Includes installment loans of $216 million and $80 million at September 30, 2020 and December 31, 2019, respectively, substantially all of which were current and originated within the past 12 months.

(3) Balances at September 30, 2020 include the impact of payment holidays provided primarily in the second quarter of 2020 by the Company to some consumers as a part of our COVID-19 payment relief initiatives.

The following table presents the delinquency status of the principal amount of merchant loans, advances, and interest and fees receivable by year of origination. The amounts are based on the number of days past the expected or contractual repayment date for amounts outstanding. The “current” category represents balances that are within 29 days of the contractual repayment dates, or within 29 days of the expected repayment date.


September 30, 2020
(In millions, except percentages)
	2020		2019		2018		2017		2016		Total		Percent
Current	$	931	$	409	$	8	$	—	$	—	$	1,348	77.6%
30 - 59 Days	67		75		6		—		—		148		8.5%
60 - 89 Days	27		40		4		—		—		71		4.1%
90 - 179 Days	40		99		11		—		—		150		8.6%
180+ Days	1		14		4		1		—		20		1.2%
Total(1)	$	1,066	$	637	$	33	$	1	$	—	$	1,737	100%

(1) Balances include the impact of payment holidays provided primarily during the second quarter of 2020 by the Company as a part of our COVID-19 payment relief initiatives.

The following table presents our estimate of the principal amount of merchant loans, advances, and interest and fees receivable past their original expected or contractual repayment period as of December 31, 2019, prior to the adoption of the new credit losses accounting guidance as described in “Note 1—Overview and Summary of Significant Accounting Policies.”


December 31, 2019
(In millions, except percentages)
Within Original Expected Repayment Period		30 - 59 Days Greater			60 - 89 Days Greater			90 - 180 Days Greater			180+ Days			Total Past Original Expected Repayment Period			Total
$	2,523	$	115		$	61		$	100		$	17		$	293		$	2,816
89.6%		4.1		%	2.1		%	3.6		%	0.6		%	10.4		%	100		%

Allowance for loans and interest receivable

The following table summarizes the activity in the allowance for consumer loans and interest receivable for the nine months ended September 30, 2020 and 2019:


	September 30, 2020						September 30, 2019
	Consumer Loans Receivable		Interest Receivable		Total Allowance(1)		Consumer Loans Receivable		Interest Receivable		Total Allowance(1)
	(In millions)
Beginning balance	$	49	$	8	$	57	$	27	$	3	$	30
Adjustment for adoption of credit losses accounting standard	24		4		28		—		—		—
Provisions	227		47		274		18		6		24
Charge-offs	(57)		(10)		(67)		(30)		(4)		(34)
Recoveries(2)	21		—		21		25		—		25
Other(3)	7		1		8		(1)		—		(1)
Ending balance	$	271	$	50	$	321	$	39	$	5	$	44

(1) Excludes allowances from other consumer credit products of $4 million and $11 million at September 30, 2020 and September 30, 2019, respectively.

(2) The recoveries were primarily related to fully charged-off U.S. consumer credit receivables not subject to the sale to Synchrony.

(3) Includes amounts related to foreign currency remeasurement.

The following table summarizes the activity in the allowance for merchant loans, advances, and interest and fees receivable, for the nine months ended September 30, 2020 and 2019:


	September 30, 2020						September 30, 2019
	Merchant Loans and Advances		Interest and Fees Receivable		Total Allowance		Merchant Loans and Advances		Interest and Fees Receivable		Total Allowance
	(In millions)
Beginning balance	$	171	$	20	$	191	$	115	$	15	$	130
Adjustment for adoption of credit losses accounting standard	165		17		182		—		—		—
Provisions	298		27		325		181		22		203
Charge-offs	(197)		(20)		(217)		(140)		(16)		(156)
Recoveries	13		—		13		11		—		11
Ending balance	$	450	$	44	$	494	$	167	$	21	$	188

Loans modified as TDRs

The following table shows the merchant loans and interest receivables which have been modified as TDRs in the three and nine months ended September 30, 2020:


	Number of Accounts (in thousands)	Outstanding Balances(1) (in millions)		Weighted Average Payment Term Extensions (in months)
Loans and interest receivable	6	$	238	38

(1) Balances are as of modification date.