Capital One 2014 Annual Report Download - page 213

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The unpaid principal balance of manufactured housing securitization transactions where we are the residual interest
holder was $893 million and $1.0 billion as of December 31, 2014 and 2013, respectively. In the event the third-
party servicer does not fulfill its obligation to exercise the clean-up calls on certain transactions, the obligation
reverts to us and we would assume approximately $420 million of loans receivable upon our execution of the clean-
up call with the requirement to absorb any losses on the loans receivable.
We monitor the underlying assets for trends in delinquencies and related losses and review the purchaser’s financial
strength as well as servicing performance. These factors are considered in assessing the adequacy of the liabilities
established for these obligations and the valuations of the assets.
Other VIEs
Affordable Housing Entities
As part of our community reinvestment initiatives, we invest in private investment funds that make equity investments
in multi-family affordable housing properties. We receive affordable housing tax credits for these investments. The
activities of these entities are financed with a combination of invested equity capital and debt. For those investment funds
considered to be VIEs, we are not required to consolidate them if we do not have the power to direct the activities that
most significantly impact the economic performance of those entities. We record our interests in these unconsolidated
VIEs in loans held for investment, other assets and other liabilities on our consolidated balance sheets. Our interests
consisted of assets of approximately $3.5 billion and $3.0 billion as of December 31, 2014 and 2013, respectively. Our
maximum exposure to these entities is limited to our variable interests in the entities and was $3.5 billion and $3.0 billion
as of December 31, 2014 and 2013, respectively. The creditors of the VIEs have no recourse to our general credit and
we do not provide additional financial or other support other than during the period that we are contractually required to
provide. The total assets of the unconsolidated VIE investment funds were $10.2 billion and $9.8 billion as of December
31, 2014 and 2013, respectively.
Entities that Provide Capital to Low-Income and Rural Communities
We hold variable interests in entities (“Investor Entities”) that invest in community development entities (“CDEs”)
that provide debt financing to businesses and non-profit entities in low-income and rural communities. Variable
interests in the CDEs held by the consolidated Investor Entities are also our variable interests. The activities of the
Investor Entities are financed with a combination of invested equity capital and debt. The activities of the CDEs are
financed solely with invested equity capital. We receive federal and state tax credits for these investments. We
consolidate the VIEs in which we have the power to direct the activities that most significantly impact the VIE’s
economic performance and the obligation to absorb losses or right to receive benefits that could be potentially
significant to the VIE. We have also consolidated other investments and CDEs that we do not consider VIEs. The
assets of the VIEs that we consolidated, which totaled approximately $374 million and $389 million as of December
31, 2014 and 2013, respectively, are reflected on our consolidated balance sheets in cash, loans held for investment,
interest receivable and other assets. The liabilities are reflected in other liabilities. The creditors of the VIEs have no
recourse to our general credit. We have not provided additional financial or other support other than during the
period that we are contractually required to provide.
CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)