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Receivables Held for Sale (Tables)
 6 Months Ended
Jun. 30, 2013
Receivables Held-for-sale [Abstract]  
Summary of Receivables Held for Sale
The following table summarizes receivables held for sale which are carried at the lower of amortized cost or fair value:
 
June 30, 2013
 
December 31, 2012
 
(in millions)
First lien real estate secured
$
4,991

 
$
3,022

Personal non-credit card
—

 
3,181

Total receivables held for sale
$
4,991

 
$
6,203
Summary of Activity in Receivables Held for Sale

The table below summarizes the activity in receivables held for sale during the three and six months ended June 30, 2013.
 
Real Estate Secured
 
Personal Non-Credit Card
 
Total
 
(in millions)
Three Months Ended June 30, 2013:
 
 
 
 
 
Receivables held for sale at beginning of period
$
3,407

 
$
2,947

 
$
6,354

Receivable sales:
 
 
 
 
 
First lien real estate secured
(230
)
 
—

 
(230
)
Personal non-credit card receivables
—

 
(2,947
)
 
(2,947
)
Lower of amortized cost or fair value adjustment on receivables held for sale
471

 
—

 
471

Carrying value of real estate secured receivables held for sale settled through short sale or transfer to REO
(171
)
 
—

 
(171
)
Change in receivable balance, including collections
(23
)
 
—

 
(23
)
Transfer of first lien real estate secured into held for sale at the lower of amortized cost or fair value
1,537

 
—

 
1,537

Receivables held for sale at end of period(1)
$
4,991

 
$
—

 
$
4,991

 
 
 
 
 
 
Six Months Ended June 30, 2013:
 
 
 
 
 
Receivables held for sale at beginning of period
$
3,022

 
$
3,181

 
$
6,203

Receivable sales:
 
 
 
 
 
First lien real estate secured
(230
)
 
—

 
(230
)
Personal non-credit card receivables
—

 
(2,947
)
 
(2,947
)
Lower of amortized cost or fair value adjustment on receivables held for sale
1,007

 
(82
)
 
925

Carrying value of real estate secured receivables held for sale settled through short sale or transfer to REO
(318
)
 
—

 
(318
)
Change in receivable balance, including collections
(27
)
 
(152
)
 
(179
)
Transfer of first lien real estate secured into held for sale at the lower of amortized cost or fair value
1,537

 
—

 
1,537

Receivables held for sale at end of period(1)
$
4,991

 
$
—

 
$
4,991

 
(1) 
Net of a valuation allowance of $309 million at June 30, 2013.
Allowance for Credit Losses on Financing Receivables
The following table summarizes the changes in credit loss reserves by product/class and the related receivable balance by product during the three and six months ended June 30, 2013 and 2012:
 
Real Estate Secured
 
Personal Non- Credit Card
 
Total
  
First Lien
 
Second Lien
 
 
(in millions)
Three Months Ended June 30, 2013:
 
 
 
 
 
 
 
Credit loss reserve balances at beginning of period
$
3,619

 
$
694

 
$
—

 
$
4,313

Provision for credit losses
250

 
22

 
(5
)
 
267

Net charge-offs:
 
 
 
 
 
 
 
Charge-offs(3)
(437
)
 
(90
)
 
—

 
(527
)
Recoveries
31

 
9

 
5

 
45

Total net charge-offs
(406
)
 
(81
)
 
5

 
(482
)
Credit loss reserve balance at end of period
$
3,463

 
$
635

 
$
—

 
$
4,098

Six Months Ended June 30, 2013:
 
 
 
 
 
 
 
Credit loss reserve balances at beginning of period
$
3,867

 
$
740

 
$
—

 
$
4,607

Provision for credit losses
266

 
62

 
(37
)
 
291

Net charge-offs:
 
 
 
 
 
 
 
Charge-offs(3)
(738
)
 
(188
)
 
—

 
(926
)
Recoveries
60

 
21

 
37

 
118

Total net charge-offs
(678
)
 
(167
)
 
37

 
(808
)
Other
8

 
—

 
—

 
8

Credit loss reserve balance at end of period
$
3,463

 
$
635

 
$
—

 
$
4,098

Reserve components:
 
 
 
 
 
 
 
Collectively evaluated for impairment
$
624

 
$
176

 
$
—

 
$
800

Individually evaluated for impairment(1)
2,775

 
458

 
—

 
3,233

Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell
62

 
1

 
—

 
63

Receivables acquired with deteriorated credit quality
2

 
—

 
—

 
2

Total credit loss reserves
$
3,463

 
$
635

 
$
—

 
$
4,098

Receivables:
 
 
 
 
 
 
 
Collectively evaluated for impairment
$
14,300

 
$
2,166

 
$
—

 
$
16,466

Individually evaluated for impairment(1)
10,667

 
1,098

 
—

 
11,765

Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell
823

 
48

 
—

 
871

Receivables acquired with deteriorated credit quality
8

 
2

 
—

 
10

Total receivables
$
25,798

 
$
3,314

 
$
—

 
$
29,112

Three Months Ended June 30, 2012:
 
 
 
 
 
 
 
Credit loss reserve balances at beginning of period
$
4,171

 
$
779

 
$
915

 
$
5,865

Provision for credit losses(2)
508

 
90

 
140

 
738

Net charge-offs:
 
 
 
 
 
 
 
Charge-offs(3)
(830
)
 
(134
)
 
(168
)
 
(1,132
)
Recoveries
9

 
15

 
78

 
102

Total net charge-offs
(821
)
 
(119
)
 
(90
)
 
(1,030
)
Reserves on receivables transferred to held for sale
—

 
—

 
(965
)
 
(965
)
Credit loss reserve balance at end of period
$
3,858

 
$
750

 
$
—

 
$
4,608

 
 
 
 
 
 
 
 
 
Real Estate Secured
 
Personal Non- Credit Card
 
Total
  
First Lien
 
Second Lien
 
 
(in millions)
Six Months Ended June 30, 2012:
 
 
 
 
 
 
 
Credit loss reserve balances at beginning of period
$
4,089

 
$
823

 
$
1,040

 
$
5,952

Provision for credit losses(2)
1,150

 
221

 
158

 
1,529

Net charge-offs:
 
 
 
 
 
 
 
Charge-offs(3)
(1,398
)
 
(324
)
 
(389
)
 
(2,111
)
Recoveries
17

 
30

 
156

 
203

Total net charge-offs
(1,381
)
 
(294
)
 
(233
)
 
(1,908
)
Reserves on receivables transferred to held for sale
—

 
—

 
(965
)
 
(965
)
Credit loss reserve balance at end of period
$
3,858

 
$
750

 
$
—

 
$
4,608

Reserve components:
 
 
 
 
 
 
 
Collectively evaluated for impairment
$
625

 
$
187

 
$
—

 
$
812

Individually evaluated for impairment(1)
3,144

 
561

 
—

 
3,705

Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell
82

 
1

 
—

 
83

Receivables acquired with deteriorated credit quality
7

 
1

 
—

 
8

Total credit loss reserves
$
3,858

 
$
750

 
$
—

 
$
4,608

Receivables:
 
 
 
 
 
 
 
Collectively evaluated for impairment
$
18,614

 
$
2,790

 
$
—

 
$
21,404

Individually evaluated for impairment(1)
10,918

 
1,153

 
—

 
12,071

Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell
1,373

 
68

 
—

 
1,441

Receivables acquired with deteriorated credit quality
35

 
5

 
—

 
40

Total receivables
$
30,940

 
$
4,016

 
$
—

 
$
34,956

 
(1) 
These amounts represent TDR Loans for which we evaluate reserves using a discounted cash flow methodology. Each loan is individually identified as a TDR Loan and then grouped together with other TDR Loans with similar characteristics. The discounted cash flow impairment analysis is then applied to these groups of TDR Loans. The receivable balance above excludes TDR Loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell which totaled $726 million and $671 million at June 30, 2013 and 2012, respectively. The reserve component above excludes credit loss reserves for TDR Loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell which totaled $51 million and $41 million at June 30, 2013 and 2012, respectively. These credit loss reserves are reflected within receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell in the table above.
(2) 
The three and six months ended June 30, 2012 includes $112 million related to the lower of amortized cost or fair value attributable to credit for personal non-credit card receivables transferred to held for sale at June 30, 2012. See Note 6, "Receivables Held for Sale," for additional information.
(3) 
For collateral dependent receivables that are transferred to held for sale, existing credit loss reserves at the time of transfer are recognized as a charge-off. We transferred to held for sale a pool of real estate secured receivables that were carried at the lower of amortized cost or fair value of the collateral less cost and recognized the existing credit loss reserves on these receivables as additional charge-off totaling $119 million during the three and six months ended June 30, 2013 and $333 million during the three and six months ended June 30, 2012. See Note 6, "Receivables Held for Sale," for additional information.

The following table provides a rollforward of our valuation allowance for the three and six months ended June 30, 2013:
 
Three Months Ended June 30, 2013
 
Six Months Ended June 30, 2013
 
(in millions)
Balance at beginning of period
$
898

 
$
1,452

Initial valuation allowance for receivables transferred to held for sale during the period
99

 
99

Release of valuation allowance resulting from improvements in fair value
(471
)
 
(925
)
Release of valuation allowance for collections, loans sold, charged-off, transferred to REO or short sale
(217
)
 
(317
)
Balance at June 30, 2013
$
309

 
$
309
Summary of Components of Cumulative Lower of Amortized Cost or Fair Value Adjustment
The following table summarizes the components of the lower of amortized cost or fair value adjustment recorded in other revenues during the three and six months ended June 30, 2013 and 2012:
 
Lower of Amortized Cost or Fair Value Adjustments Associated With
 
 
 
Fair Value
 
REO
 
Short Sales
 
Total
 
(in millions)
(Income)/Expense:
 
 
 
 
 
 
 
Three Months Ended June 30, 2013:
 
 
 
 
 
 
 
Lower of amortized cost or fair value adjustments recorded as a component of:
 
 
 
 
 
 
 
Provision for credit losses
$
—

 
$
—

 
$
—

 
$
—

Other revenues:
 
 
 
 
 
 
 
Initial lower of amortized cost or fair value adjustment
99

 
—

 
—

 
99

Subsequent to initial transfer to held for sale(1)
(453
)
 
(16
)
 
(2
)
 
(471
)
Total recorded through other revenues
(354
)
 
(16
)
 
(2
)
 
(372
)
Lower of amortized cost or fair value adjustment
$
(354
)
 
$
(16
)
 
$
(2
)
 
$
(372
)
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2012:
 
 
 
 
 
 
 
Lower of amortized cost or fair value adjustments recorded as a component of:
 
 
 
 
 
 
 
Provision for credit losses
$
112

 
$
—

 
$
—

 
$
112

Other revenues:
 
 
 
 
 
 
 
Initial lower of amortized cost or fair value adjustment
1,547

 
—

 
—

 
1,547

Total recorded through other revenues
1,547

 
—

 
—

 
1,547

Lower of amortized cost or fair value adjustment
$
1,659

 
$
—

 
$
—

 
$
1,659

 
 
 
 
 
 
 
 
Six Months Ended June 30, 2013:
 
 
 
 
 
 
 
Lower of amortized cost or fair value adjustments recorded as a component of:
 
 
 
 
 
 
 
Provision for credit losses
$
—

 
$
—

 
$
—

 
$
—

Other revenues:
 
 
 
 
 
 
 
Initial lower of amortized cost or fair value adjustment
99

 
—

 
—

 
99

Subsequent to initial transfer to held for sale(1)
(865
)
 
(49
)
 
(11
)
 
(925
)
Total recorded through other revenues
(766
)
 
(49
)
 
(11
)
 
(826
)
Lower of amortized cost or fair value adjustment
$
(766
)
 
$
(49
)
 
$
(11
)
 
$
(826
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2012:
 
 
 
 
 
 
 
Lower of amortized cost or fair value adjustments recorded as a component of:
 
 
 
 
 
 
 
Provision for credit losses
$
112

 
$
—

 
$
—

 
$
112

Other revenues:
 
 
 
 
 
 
 
Initial lower of amortized cost or fair value adjustment
1,547

 
—

 
—

 
1,547

Total recorded through other revenues
1,547

 
—

 
—

 
1,547

Lower of amortized cost or fair value adjustment
$
1,659

 
$
—

 
$
—

 
$
1,659

 

(1) 
For the three months ended June 30, 2013, the fair value amount relates to an increase in the relative fair value of real estate secured receivables held for sale. For the six months ended June 30, 2013, the fair value of the lower of amortized cost or fair value adjustment reflects an increase in the relative fair value of $947 million related to real estate secured receivables held for sale and an additional charge of $82 million related to personal non-credit card receivables prior to the sale of this portfolio on April 1, 2013.