Capital One 2015 Annual Report Download - page 181

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
162 Capital One Financial Corporation (COF)
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 VIEs. Our
primary involvement with VIEs has been related to our securitization transactions in which we transferred assets from our balance
sheet to securitization trusts. We have primarily securitized credit card loans and home loans, which have provided a source of
funding for us and enabled us to transfer a certain portion of the economic risk of the loans or debt securities to third parties.
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. The 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, 2015 and 2014. 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 and restricted loans, 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 the 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 become worthless and we are required
to meet our maximum remaining funding obligations.
Table 7.1: Carrying Amount of Consolidated and Unconsolidated VIEs
December 31, 2015
Consolidated Unconsolidated
(Dollars in millions)
Carrying
Amount
of Assets
Carrying
Amount of
Liabilities
Carrying
Amount
of Assets
Carrying
Amount of
Liabilities
Maximum
Exposure to
Loss
Securitization-Related VIEs:
Credit card loan securitizations(1) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,800 $ 16,925 $ 0 $ 0 $ 0
Home loan securitizations(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 211 27 873
Total securitization-related VIEs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,800 16,925 211 27 873
Other VIEs:
Affordable housing entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 3,852 555 3,852
Entities that provide capital to low-income and rural
communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 101 0 0 0
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0 57 0 57
Total other VIEs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 101 3,909 555 3,909
Total VIEs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35,152 $ 17,026 $ 4,120 $ 582 $ 4,782