Capital One 2011 Annual Report Download - page 207

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED STATEMENTS—(Continued)
NOTE 7—VARIABLE INTEREST ENTITIES AND SECURITIZATIONS
In the normal course of business, we enter into various types of transactions with entities that are considered to
be variable interest entities (“VIEs”). Historically, our primary involvement with VIEs related to our
securitization transactions in which we transferred assets from our balance sheet to securitization trusts. These
securitization trusts typically meet the definition of a VIE. We generally securitized credit card loans, auto loans,
home loans and installment loans, which provided a source of funding for us and as a means of transferring a
certain portion of the economic risk of the loans or debt securities to third parties.
Under revised consolidation accounting guidance that became effective on January 1, 2010, the entity that has a
controlling financial interest in a VIE is referred to as the primary beneficiary and is required to consolidate the
VIE. As a result of this guidance, the vast majority of the VIEs in which we are involved have been consolidated
in our financial statements.
Summary of Consolidated and Unconsolidated VIEs
The table below presents a summary of VIEs, aggregated based on VIEs with similar characteristics, in which we
had continuing involvement or held a variable interest as of December 31, 2011 and 2010. We separately present
information for consolidated and unconsolidated VIEs.
For consolidated VIEs, we present the carrying amount of assets and liabilities reflected on our consolidated
balance sheets. The assets of consolidated VIEs primarily consist of cash and loans, which we report on our
consolidated balance sheets under restricted cash for securitization investors and restricted loans for
securitization investors, respectively. The assets of a particular VIE are the primary source of funds to settle its
obligations. The creditors of the VIEs typically do not have recourse to the general credit of our company. The
liabilities primarily consist of debt securities issued by the VIEs, which we report under securitized debt
obligations. For unconsolidated VIEs, we present the carrying amount of assets and liabilities reflected on our
consolidated balance sheets and our maximum exposure to loss. Our maximum exposure to loss is estimated
based on the unlikely event that all of the assets in the VIEs became worthless and we were required to meet our
maximum remaining funding obligations.
December 31, 2011
Consolidated Non-Consolidated
(Dollars in millions)
Carrying
Amount
of Assets
Carrying
Amount of
Liabilities
Carrying
Amount
of Assets
Carrying
Amount of
Liabilities
Maximum
Exposure to
Loss(3)
Securitization-related VIEs:
Credit card loan securitizations(4) ............. $48,309 $17,443 $ 0 $ 0 $ 0
Auto loan securitizations(4) .................. 95 78 0 0 0
Home loan securitizations ................... 0 0 161(1) 27(2) 269
Other asset securitizations(4) ................. 36 36 0 0 0
Total securitization related VIEs .................. 48,440 17,557 161 27 269
Other VIEs:
Affordable housing entities .................. 0 0 2,044 289 2,044
Entities that provide capital to low-income and
rural communities ....................... 258 0 6 3 6
Other ................................... 1 0 139 0 139
Total Other VIEs .............................. 259 0 2,189 292 2,189
Total VIEs ................................... $48,699 $17,557 $2,305 $319 $2,458
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