Discover 2014 Annual Report Download - page 127

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were reduced during the periods. During the calendar years ended December 31, 2014 and 2013, fiscal year ended
November 30, 2012 and one month ended December 31, 2012, the Company forgave approximately $42 million,
$40 million, $44 million and $3 million, respectively, of interest and fees as a result of accounts entering into a credit
card loan modification program.
The following table provides information on loans that entered a loan modification program during the period
(dollars in millions):
For the Calendar Years Ended December 31, For the Fiscal Year Ended
November 30, 2012
For the One Month
Ended December 31,
2012
2014 2013
Number of
Accounts Balances Number of Accounts Balances Number of Accounts Balances Number of Accounts Balances
Accounts that entered a loan
modification program during
the period:
Credit card:
Internal programs ............. 48,041 $ 316 40,653 $ 256 50,946 $ 345 3,078 $ 19
External programs ............ 32,443 $ 169 35,020 $ 189 40,530 $ 227 2,614 $ 14
Personal loans ...................... 3,528 $ 42 2,178 $ 27 1,555 $ 20 120 $ 2
Private student loans ............. 1,453 $ 21 877 $ 17 470 $ 11 60 $ 2
The following table presents the carrying value of loans that experienced a payment default during the period
that had been modified in a troubled debt restructuring during the 15 months preceding the end of each period (dollars
in millions):
For the Calendar Years Ended December 31, For the Fiscal Year Ended
November 30, 2012
For the One Month
Ended December 31,
2012
2014 2013
Number
of
Accounts
Aggregated
Outstanding
Balances
Upon
Default
Number
of
Accounts
Aggregated
Outstanding
Balances
Upon
Default
Number
of
Accounts
Aggregated
Outstanding
Balances
Upon
Default
Number
of
Accounts
Aggregated
Outstanding
Balances
Upon
Default
Troubled debt restructurings that
subsequently defaulted:
Credit card(1)(2):
Internal programs ............. 10,195 $ 62 9,186 $ 57 15,703 $ 106 945 $ 6
External programs ............ 7,363 $ 30 8,481 $ 36 8,543 $ 40 722 $ 3
Personal loans(2) ................... 433 $ 5 284 $ 3 343 $ 4 22 $ —
Private student loans(3) ........... 1,155 $ 18 628 $ 12 172 $ 4 42 $ 1
(1) The outstanding balance upon default is the loan balance at the end of the month prior to default. Terms revert back to the pre-modification terms for customers who
default from a temporary program and charging privileges remain revoked in most cases.
(2) A customer defaults from a modification program after two consecutive missed payments.
(3) Student loan defaults have been defined as loans that are 60 or more days delinquent.
Of the account balances that defaulted as shown above for the calendar years ended December 31, 2014 and
2013, fiscal year ended November 30, 2012 and one month ended December 31, 2012, approximately 35%, 40%,
46% and 39%, respectively, of the total balances were charged off at the end of the month in which they defaulted. For
accounts that have defaulted from a loan modification program and have not subsequently charged off, the balances
are included in the allowance for loan loss analysis discussed above under "— Allowance for Loan Losses."
Purchased Credit-Impaired Loans
Purchased loans with evidence of credit deterioration since origination for which it is probable that not all
contractually required payments will be collected are considered impaired at acquisition and are reported as PCI loans.
The private student loans acquired in the SLC transaction as well as the additional private student loan portfolio
comprise the Company’s only PCI loans at December 31, 2014 and 2013. Total PCI student loans had an outstanding