Capital One 2008 Annual Report Download - page 165
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147
The following table presents the carrying amount of assets and liabilities of those VIEs of which the Company is the primary
beneficiary, the carrying amount of assets and liabilities and maximum exposure to loss of those VIEs of which the Company is not
the primary beneficiary but holds a significant variable interest.
Consolidated(1)
Unconsolidated
Carrying
Amount of
Assets
Carrying
Amount of
Liabilities
Carrying
Amount of
Assets
Carrying
Amount of
Liabilities
Maximum
Exposure to
Loss(2)(3)
Variable interest entities, December 31, 2008
Affordable housing entities .......................................................
.
$ $ $ 971,151 $ 554,605 $ 97,151
Entities that provide capital to low-income and rural
communities..........................................................................
.
189,700 37,701 46,558 46,558
Other..........................................................................................
.
246,038 246,038
Total variable interest entities ......................................
.
$ 189,700 $ 37,701 $ 1,263,747 $ 554,605 $ 1,263,747
Variable interest entities, December 31, 2007
Affordable housing entities .......................................................
.
$ $ $ 509,668 $ 324,227 $ 509,668
Entities that provide capital to low-income and rural
communities..........................................................................
.
102,090 12,010 12,010
Other..........................................................................................
.
Total variable interest entities ......................................
.
$ 102,090 $ $ 521,678 $ 324,227 $ 521,678
(1) The Company consolidates a VIE when it is the primary beneficiary that will absorb the majority of the expected losses,
majority of the expected residual returns or both.
(2) The maximum exposure to loss represents the amount of loss the Company would incur in the unlikely event that all of the
assets in the VIEs became worthless.
(3) The difference between the carrying amount of the liability and the maximum exposure to loss is the Companys variable
interest in the VIEs. In the event that the assets of the VIEs became completely worthless, the Company would lose its variable
interest in the VIEs. The Company is not required to provide any support to these entities other than what it was previously
contractually required to provide, therefore the Companys maximum exposure to loss is limited to its variable interests in the
VIEs.
Note 21
Regulatory Matters
The Company is subject to capital adequacy guidance adopted by the Federal Reserve Board (the Federal Reserve), and CONA and
COBNA (collectively, the Banks) are subject to capital adequacy guidelines adopted by the Office of the Comptroller of the
Currency (the OCC, and with the Federal Reserve, collectively, the regulators). The capital adequacy guidelines set minimum
risk-based and leverage capital requirements that are based on quantitative and qualitative measures of their assets and off-balance
sheet items. The Federal Reserve holds the Corporation to similar minimum capital requirements. Failure to meet minimum capital
requirements can result in possible additional, discretionary actions by a federal banking agency that, if undertaken, could have a
material adverse effect on the Corporations consolidated financial statements.