0001101215-23-000049 | 10-K | XBRL Viewer | Bread Financial Holdings INC

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Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Dec. 31, 2022	Feb. 22, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2022
Current Fiscal Year End Date	--12-31
Entity File Number	001-15749
Entity Registrant Name	BREAD FINANCIAL HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	31-1429215
Entity Address, Address Line One	3095 Loyalty Circle
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43219
City Area Code	614
Local Phone Number	729-4000
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	BFH
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 1.8
Entity Common Stock, Shares Outstanding		50,115,421
Documents Incorporated by Reference	Certain information called for by Part III is incorporated by reference to certain sections of the Proxy Statement for the 2023 Annual Meeting of our stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2022.
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0001101215
Amendment Flag	false

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2022
Audit Information [Abstract]
Auditor Firm ID	34
Auditor Name	Deloitte & Touche LLP
Auditor Location	Columbus, Ohio

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Interest income
Interest and fees on loans	$ 4,615	$ 3,861	$ 3,931
Interest on cash and investment securities	69	7	21
Total interest income	4,684	3,868	3,952
Interest expense
Interest on deposits	243	167	238
Interest on borrowings	260	216	261
Total interest expense	503	383	499
Net interest income	4,181	3,485	3,453
Non-interest income
Interchange revenue, net of retailer share arrangements	(469)	(369)	(332)
Other	114	156	177
Total non-interest income	(355)	(213)	(155)
Total net interest and non-interest income	3,826	3,272	3,298
Provision for credit losses	1,594	544	1,266
Total net interest and non-interest income, after provision for credit losses	2,232	2,728	2,032
Non-interest expenses
Employee compensation and benefits	779	671	609
Card and processing expenses	359	323	396
Information processing and communication	274	216	191
Marketing expenses	180	160	143
Depreciation and amortization	113	92	106
Other	227	222	286
Total non-interest expenses	1,932	1,684	1,731
Income from continuing operations before income taxes	300	1,044	301
Provision for income taxes	76	247	93
Income from continuing operations	224	797	208
(Loss) income from discontinued operations, net of income taxes	(1)	4	6
Net income	$ 223	$ 801	$ 214
Basic income per share
Income from continuing operations (in dollars per share)	$ 4.48	$ 16.02	$ 4.36
(Loss) income from discontinued operations (in dollars per share)	(0.01)	0.07	0.11
Net income per share (in dollars per share)	4.47	16.09	4.47
Diluted income per share
Income from continuing operations (in dollars per share)	4.47	15.95	4.35
(Loss) income from discontinued operations (in dollars per share)	(0.01)	0.07	0.11
Net income per share (in dollars per share)	$ 4.46	$ 16.02	$ 4.46
Weighted average common shares outstanding
Basic (in shares)	49.9	49.7	47.8
Diluted (in shares)	50.0	50.0	47.9

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 223	$ 801	$ 214
Other comprehensive (loss) income
Unrealized (loss) gain on available-for-sale securities	(25)	(24)	22
Tax benefit (expense)	6	2	(1)
Unrealized (loss) gain on available-for-sale securities, net of tax	(19)	(22)	21
Unrealized gain (loss) on cash flow hedges	0	1	(1)
Tax benefit	0	0	0
Unrealized gain (loss) on cash flow hedges	0	1	(1)
Unrealized gain on net investment hedge	0	20	0
Tax expense	0	(13)	0
Unrealized gain on net investment hedge, net of tax	0	7	0
Foreign currency translation adjustments (inclusive of deconsolidation of $54 million and $4 million for the years ended December 31, 2021 and 2020, respectively, related to the disposition of businesses)	0	17	75
Other comprehensive (loss) income, net of tax	(19)	3	95
Total comprehensive income, net of tax	$ 204	$ 804	$ 309

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
ASSETS
Cash and cash equivalents	$ 3,891	$ 3,046
Credit card and other loans
Total credit card and other loans (includes loans available to settle obligations of consolidated variable interest entities: 2022, $15,383; 2021, $11,215)	21,365	17,399
Allowance for credit losses	(2,464)	(1,832)
Credit card and other loans, net	18,901	15,567
Investment securities	221	239
Property and equipment, net	195	215
Goodwill and intangible assets, net	799	687
Other assets	1,400	1,992
Total assets	25,407	21,746
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	13,826	11,027
Debt issued by consolidated variable interest entities	6,115	5,453
Long-term and other debt	1,892	1,986
Other liabilities	1,309	1,194
Total liabilities	23,142	19,660
Commitments and contingencies (Note 15)
Stockholders’ equity
Common stock, $0.01 par value; authorized, 200.0 million shares; issued, 49.9 million and 49.8 million shares as of December 31, 2022 and December 31, 2021, respectively	1	1
Additional paid-in capital	2,192	2,174
Retained earnings (accumulated deficit)	93	(87)
Accumulated other comprehensive loss	(21)	(2)
Total stockholders’ equity	2,265	2,086
Total liabilities and stockholders’ equity	$ 25,407	$ 21,746

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Credit card and loan receivables restricted for securitization investors	$ 15,383	$ 11,215
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	200.0	200.0
Common stock, issued shares (in shares)	49.9	49.8
Variable Interest Entity, Primary Beneficiay
Credit card and loan receivables restricted for securitization investors	$ 15,383	$ 11,215

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings (Accumulated Deficit)	Retained Earnings (Accumulated Deficit) Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Loss
Balance (in shares) at Dec. 31, 2019			115,000,000.0
Beginning balance at Dec. 31, 2019	$ 1,589	$ (485)	$ 1	$ 3,258	$ (6,733)	$ 5,163	$ (485)	$ (100)
Increase (Decrease) in Stockholders' Equity
Net income	214					214
Other comprehensive income (loss)	95							95
Stock-based compensation	21			21
Common stock issued as consideration for acquired business (in shares)			1,900,000
Common stock issued as consideration for acquired business	149			149
Dividends and dividend equivalent rights declared	(60)					(60)
Issuance of shares to employees, net of shares withheld for employee taxes (in shares)			200,000
Issuance of shares to employees, net of shares withheld for employee taxes	(1)			(1)
Balance (in shares) at Dec. 31, 2020			117,100,000
Ending balance at Dec. 31, 2020	1,522		$ 1	3,427	(6,733)	4,832		(5)
Increase (Decrease) in Stockholders' Equity
Net income	801					801
Other comprehensive income (loss)	3							3
Stock-based compensation	29			29
Dividends and dividend equivalent rights declared	(42)					(42)
Retirement of treasury stock (in shares)			(67,000,000)
Retirement of treasury stock	0			1,280	(6,733)	5,453
Spinoff of Loyalty Ventures Inc.	(225)					(225)
Issuance of shares to employees, net of shares withheld for employee taxes (in shares)			100,000
Issuance of shares to employees, net of shares withheld for employee taxes	(2)			(2)
Balance (in shares) at Dec. 31, 2021			49,800,000
Ending balance at Dec. 31, 2021	2,086		$ 1	2,174	0	(87)		(2)
Increase (Decrease) in Stockholders' Equity
Net income	223					223
Other comprehensive income (loss)	(19)							(19)
Stock-based compensation	33			33
Dividends and dividend equivalent rights declared	$ (43)					(43)
Repurchase of common stock (in shares)	(200,000)		(200,000)
Repurchase of common stock	$ (12)			(12)
Issuance of shares to employees, net of shares withheld for employee taxes (in shares)			300,000
Issuance of shares to employees, net of shares withheld for employee taxes	(3)			(3)
Balance (in shares) at Dec. 31, 2022			49,900,000
Ending balance at Dec. 31, 2022	$ 2,265		$ 1	$ 2,192	$ 0	$ 93		$ (21)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Statement of Stockholders' Equity [Abstract]
Common Stock dividends and dividend equivalent rights declared (in dollars per share)	$ 0.84	$ 0.84	$ 1.26

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 223	$ 801	$ 214
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	1,594	544	1,266
Depreciation and amortization	113	123	184
Deferred income taxes	(245)	(15)	(223)
Non-cash stock compensation	33	29	21
Amortization of deferred financing costs	24	31	36
Amortization of deferred origination costs	86	75	74
Asset impairment charges	0	0	64
Other	67	(4)	(36)
Change in other operating assets and liabilities, net of acquisitions and dispositions
Change in other assets	(134)	(30)	210
Change in other liabilities	87	(11)	73
Net cash provided by operating activities	1,848	1,543	1,883
CASH FLOWS FROM INVESTING ACTIVITIES
Change in credit card and other loans	(3,222)	(1,805)	1,784
Change in redemption settlement assets	0	(113)	(41)
Payments for acquired businesses, net of cash and restricted cash	0	(75)	(267)
Proceeds from sale of credit card loan portfolios	0	512	289
Purchase of credit card loan portfolios	(1,804)	(110)	0
Capital expenditures	(68)	(84)	(54)
Purchases of investment securities	(43)	(93)	(40)
Maturities of investment securities	30	73	77
Other	(4)	4	26
Net cash (used in) provided by investing activities	(5,111)	(1,691)	1,774
CASH FLOWS FROM FINANCING ACTIVITIES
Unsecured borrowings under debt agreements	218	38	1,276
Repayments/maturities of unsecured borrowings under debt agreements	(319)	(864)	(1,320)
Debt issued by consolidated variable interest entities	4,248	4,278	2,419
Repayments/maturities of debt issued by consolidated variable interest entities	(3,587)	(4,538)	(4,096)
Net increase (decrease) in deposits	2,778	1,228	(2,370)
Debt proceeds from spinoff of Loyalty Ventures Inc.	0	652	0
Transfers to Loyalty Ventures Inc. related to spinoff	0	(127)	0
Payment of deferred financing costs	(13)	(13)	(19)
Dividends paid	(43)	(42)	(61)
Other	(15)	(4)	4
Net cash provided by (used in) financing activities	3,267	608	(4,167)
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash	0	0	15
Change in cash, cash equivalents and restricted cash	4	460	(495)
Cash, cash equivalents and restricted cash at beginning of period	3,923	3,463	3,958
Cash, cash equivalents and restricted cash at end of period	3,927	3,923	3,463
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for interest	466	357	488
Cash paid during the year for income taxes, net	$ 338	$ 325	$ 268

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE BUSINESS

Bread Financial Holdings, Inc. (BFH) or, including its consolidated subsidiaries and variable interest entities (VIEs), the Company) is a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions. The Company creates opportunities for its customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, the Company delivers growth for its partners through a comprehensive product suite, including private label and co-brand credit cards and buy now, pay later products such as installment loans and “split-pay” offerings. The Company also offers direct-to-consumer solutions that give customers more access, choice and freedom through its branded Bread CashbackTM American Express® Credit Card and Bread SavingsTM products.

Effective March 23, 2022, Alliance Data Systems Corporation was renamed Bread Financial Holdings, Inc., and on April 4, 2022, the Company changed its New York Stock Exchange ticker from “ADS” to “BFH”. Neither the name change nor the ticker change affected the Company’s legal entity structure, nor did either change have an impact on its Consolidated Financial Statements.

The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation, in particular, as a result of the spinoff of its LoyaltyOne segment and its classification as discontinued operations, the Company has adjusted the presentation of its Consolidated Financial Statements from its historical approach under Securities and Exchange Commission (SEC) Regulation S-X Article 5, which is broadly applicable to all “commercial and industrial companies”, to Article 9, which is applicable to “bank holding companies” (BHCs). While neither the Company nor any of its subsidiaries are considered a “bank” within the meaning of the Bank Holding Company Act, the changes from the historical presentation, to the BHC presentation, the most significant of which reflect a reclassification of Interest expense within Net interest income, are intended to reflect the Company’s operations going forward and better align the Company with its peers for comparability purposes. For a discussion of the prior period reclassifications, please refer to Note 22, “Discontinued Operations and Bank Holding Company Presentation” in our Annual Report on Form 10-K for the year ended December 31, 2021. As noted above, the Company’s Consolidated Financial Statements have been presented with its LoyaltyOne segment as discontinued operations, see Note 22, “Discontinued Operations”, for more information.

SIGNIFICANT ACCOUNTING POLICIES

The Company presents its accounting policies within the Notes to the Consolidated Financial Statements to which they relate; the table below lists such accounting policies and the related Notes. The remaining significant accounting policies applied by the Company are included following the table.

Significant Accounting Policy

Note Number

Note Title

Credit Card and Other Loans

Note 2

Credit Card and Other Loans

Allowance for Credit Losses

Note 3

Allowance for Credit Losses

Transfers of Financial Assets

Note 4

Securitizations

Investment Securities

Note 5

Investment Securities

Property and Equipment

Note 6

Property and Equipment, Net

Goodwill

Note 7

Goodwill and Intangible Assets, Net

Intangible Assets, Net

Note 7

Goodwill and Intangible Assets, Net

Leases

Note 9

Leases

Stock Compensation Expense

Note 18

Stockholders' Equity

Income Taxes

Note 19

Income Taxes

Earnings Per Share

Note 20

Earnings Per Share

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of BFH and all subsidiaries in which the Company has a controlling financial interest. For voting interest entities, a controlling financial interest is determined when the Company is able to exercise control over the operating and financial decisions of the investee. For variable interest entities (VIEs), which are themselves determined based on the amount and characteristics of the equity in the entity, the Company has a controlling financial interest when it is determined to be the primary beneficiary. The primary beneficiary is the party having both the power to exercise control over the activities that most significantly impact the VIE’s financial performance, as well as the obligation to absorb the losses of, or the right to receive the benefits from, the VIE that could potentially be significant to that VIE. The Company is the primary beneficiary of its securitization trusts (the Trusts) and therefore consolidates these Trusts within its Consolidated Financial Statements.

In cases where the Company does not have a controlling financial interest, but is able to exert significant influence over the operating and financial decisions of the entity, the Company accounts for such investments under the equity method.

All intercompany transactions have been eliminated.

Currency Translation

The Company’s monetary assets and liabilities denominated in foreign currencies, for example those of subsidiaries outside of the United States of America (U.S.), are translated into U.S. dollars based on the rates of exchange in effect at the end of the reporting period, while non-monetary assets and liabilities are translated based on the rates of exchange in effect as of the date of the transaction giving rise to the asset or liability. Income and expense items are translated at the average exchange rates prevailing during the period. The resulting effects, along with any related hedge or tax impacts, are recorded in Accumulated other comprehensive loss, a component of stockholders’ equity. Translation adjustments, along with the related hedge and tax impacts, are recognized in the Consolidated Statements of Income upon the sale or substantial liquidation of an investment in a foreign subsidiary. Gains and losses resulting from transactions in currencies other than the entity’s functional currency are recognized in Other non-interest expenses in the Consolidated Statements of Income, and were insignificant for each of the periods presented. Historically, the Company’s impacts from foreign currency exchange rate fluctuations were most prevalent within businesses that have been spun off, such as LoyaltyOne.

Amounts Based on Estimates and Judgments

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments about future events that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, as well as the reported amounts of income and expenses during the reporting periods. The most significant of those estimates and judgments relate to the Company’s Allowance for credit losses and Provision for income taxes; actual results could differ.

Revenue Recognition

The Company’s primary source of revenue is from Interest and fees on loans from its various credit card and other loan products, and to a lesser extent from contractual relationships with its brand partners. The following describes the Company’s recognition policies across its various sources of revenue.

Interest and fees on loans: Represent revenue earned on customer accounts owned by the Company, and is recognized in the period earned in accordance with the contractual provisions of the credit agreements. Interest and fees continue to accrue on all accounts, except in limited circumstances, until the account balance and all related interest and fees are paid or charged-off, in the month during which an account becomes 180 days past due for credit card loans or 120 days past due for other loans, which are buy now, pay later products such as installment loans and the Company’s “split-pay” offerings (BNPL) loans. Charge-offs for unpaid interest and fees, as well as any adjustments to the allowance associated with unpaid interest and fees, are recorded as a reduction of Interest and fees on loans. Direct loan origination costs on Credit card and other loans are deferred and amortized on a straight-line basis over a one-year period for credit card loans, or for BNPL loans over the life of the loan, and are recorded as a reduction to Interest and fees on loans. As of December 31, 2022 and 2021, the remaining unamortized deferred direct loan origination costs were $46 million and $48 million, respectively, and included in Total credit card and other loans.

Interest on cash and investment securities: Represents revenue earned on cash and cash equivalents as well as investments

in debt and equity securities, and is recognized in the period earned.

Interchange revenue, net of retailer share arrangements: Represents revenue earned from merchants, including our brand partners, and cardholders from processing and servicing accounts, and is recognized as such services are performed. Revenue earned from merchants, including our brand partners, primarily consists of merchant and interchange fees, which are transaction fees charged to the merchant for the processing of credit card transactions and are recognized at the time the cardholder transaction occurs. Our credit card program agreements may also provide for royalty payments to our brand partners based on purchased volume or if certain contractual incentives are met, such as if the economic performance of the program exceeds a contractually defined threshold, or for payments for new accounts. These amounts are recorded as a reduction of revenue in the period incurred.

Other non-interest income: Represents ancillary revenues earned from cardholders, consisting primarily of monthly fees from the purchase of certain payment protection products which are recognized based on the average cardholder account balance over time and can be cancelled at any point by the cardholder, as well as gains or losses on the sales of loan portfolios, and income or losses from equity method investments.

Contract Costs: The Company recognizes as an asset contract costs, such as up-front payments pursuant to contractual agreements with brand partners. Such costs are deferred and recognized on a straight-line basis over the term of the related agreement. Depending on the nature of the contract costs, the amortization is recorded as a reduction to Non-interest income, or as a charge to Non-interest expenses, in the Company’s Consolidated Statements of Income. Amortization of contract costs recorded as a reduction of Interchange revenue, net of retailer share arrangements was $72 million, $64 million and $65 million for the years ended December 31, 2022, 2021 and 2020, respectively; amortization of contract costs recorded in Non-interest expenses totaled $12 million, $11 million and $12 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022 and 2021, the remaining unamortized contract costs were $344 million and $364 million, respectively, and are included in Other assets on the Consolidated Balance Sheets.

The Company performs an impairment assessment when events or changes in circumstances indicate that the carrying amount of contract costs may not be recoverable. For the year ended December 31, 2020, due to the COVID-19 pandemic and resulting retail store closures and significant declines in credit sales, the Company recognized an impairment charge of $38 million in Non-interest expenses in its Consolidated Statement of Income. No impairment charges were recognized in either of the years ended December 31, 2022 or 2021.

Cash and Cash Equivalents

Cash and cash equivalents include cash and due from banks, interest-bearing cash balances such as those invested in money market funds, as well as other highly liquid short-term investments with an original maturity of three months or less, and restricted cash. As of December 31, 2022 and 2021, cash and due from banks was $288 million and $251 million, respectively, interest-bearing cash balances were $3.5 billion and $2.7 billion, respectively, and short-term investments were $130 million and $80 million, respectively.

Restricted cash primarily represents cash restricted for principal and interest repayments of debt issued by consolidated VIEs, and is recorded in Other assets on the Consolidated Balance Sheets. Restricted cash totaled $36 million and $877 million as of December 31, 2022 and 2021, respectively.

Derivative Financial Instruments

From time to time, the Company uses derivative financial instruments to manage its exposure to various financial risks; the Company does not trade or speculate in derivative financial instruments. Subject to the criteria set forth in GAAP, the Company will either designate its derivative financial instruments in hedging relationships, or as economic hedges should the criteria in GAAP not be met.

The Company’s derivative financial instruments were insignificant to the Consolidated Financial Statements for the periods presented.

CONCENTRATIONS

The Company depends on a limited number of large partner relationships for a significant portion of its revenue. As of and for the year ended December 31, 2022, the Company’s five largest credit card programs accounted for approximately 47% of its Total net interest and non-interest income and 41% of its End-of-period credit card and other loans. In particular, the Company’s programs with (alphabetically) Ulta Beauty and Victoria’s Secret & Co. and its retail affiliates each accounted for more than 10% of its Total net interest and non-interest income for the year ended December 31, 2022. A decrease in business from, or the loss of, any of the Company’s significant partners for any reason, could have a material adverse effect on its business. The Company previously announced the non-renewal of its contract with BJ’s Wholesale Club (BJ’s) and the sale of the BJ’s portfolio, which closed in late February 2023. For the year ended December 31, 2022, BJ’s branded co-brand accounts generated approximately 10% of the Company’s Total net interest and non-interest income. As of December 31, 2022, BJ’s branded co-brand accounts were responsible for approximately 11% of the Company’s Total credit card and other loans.

RECENTLY ISSUED ACCOUNTING STANDARDS

In March 2022, the Financial Accounting Standards Board issued new accounting and disclosure guidance for troubled debt restructurings effective January 1, 2023, with early adoption permitted. Specifically, the new guidance eliminates the previous recognition and measurement guidance for troubled debt restructurings while enhancing the disclosure requirements for certain loan modifications, including requiring disclosure of gross principal losses by year of loan origination. Effective January 1, 2023, the Company adopted the guidance, with no significant impact on its financial position, results of operations and regulatory risk-based capital, or anticipated impacts on its operational processes, controls and governance in support of the new guidance.

CREDIT CARD AND OTHER LOANS

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

CREDIT CARD AND OTHER LOANS

The Company’s payment and lending solutions result in the generation of credit card and other loans, which are recorded at the time a borrower enters into a point-of-sale transaction with a merchant. Credit card loans represent revolving amounts due and have a range of terms that include credit limits, interest rates and fees, which can be revised over time based on new information about the cardholder, in accordance with applicable regulations and the governing terms and conditions. Cardholders choosing to make a payment of less than the full balance due, instead of paying in full, are subject to finance charges and are required to make monthly payments based on pre-established amounts. Other loans, which again are BNPL products such as installment loans and the Company’s “split-pay” offerings, have a range of fixed terms such as interest rates, fees and repayment periods, and borrowers are required to make pre-established monthly payments over the term of the loan in accordance with the applicable terms and conditions. Credit card and other loans are presented on the Consolidated Balance Sheets net of the Allowance for credit losses, and include principal and any related accrued interest and fees. The Company continues to accrue interest and fee income on all accounts, except in limited circumstances, until the related balance and all related interest and fees are paid or charged-off; an Allowance for credit losses is established for uncollectable interest and fees.

Primarily, the Company classifies its Credit card and other loans as held for investment. The Company sells a majority of its credit card loans originated by Comenity Bank (CB) and by Comenity Capital Bank (CCB), which together are referred to herein as the “Banks”, to the Trusts, which are themselves consolidated VIEs, and therefore these loans are restricted for securitization investors. All new originations of Credit card and other loans are determined to be held for investment at origination because the Company has the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, the Company considers the average life and homogenous nature of its Credit card and other loans. In assessing whether its Credit card and other loans continue to be held for investment, the Company also considers capital levels and scheduled maturities of funding instruments used. The assertion regarding the intent and ability to hold Credit card and other loans for the foreseeable future can be made with a high degree of certainty given the maturity distribution of the Company’s direct-to-consumer deposits and other funding instruments; the demonstrated ability to replace maturing time-based deposits and other borrowings with new deposits or borrowings; and historic payment activity on its Credit card and other loans. Due to the homogenous nature of the Company’s credit card loans, amounts are classified as held for investment on a brand partner portfolio basis. From time to time certain Credit card loans are classified as held for sale, as determined on a brand partner basis. The Company carries these assets at the lower of aggregate cost or fair value, and continues to recognize finance charges on an accrual basis. Cash flows associated with Credit card and other loans originated or purchased for investment are classified as Cash flows from investing activities, regardless of any subsequent change in intent and ability.

The Company’s Credit card and other loans were as follows, as of December 31:


	2022		2021
(Millions)
Credit card loans	$	21,065	$	17,217
Installment or other loans	300		182
Total credit card and other loans (1)(2)	21,365		17,399
Less: Allowance for credit losses	(2,464)		(1,832)
Credit card and other loans, net	$	18,901	$	15,567

______________________________


(1)			Includes $15.4 billion and $11.2 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of December 31, 2022 and 2021, respectively.


(2)			Includes $307 million and $224 million, of accrued interest and fees that have not yet been billed to cardholders as of December 31, 2022 and 2021, respectively.

Credit Card and Other Loans Aging

An account is contractually delinquent if the Company does not receive the minimum payment due by the specified due date. The Company’s policy is to continue to accrue interest and fee income on all accounts, except in limited circumstances, until the balance and all related interest and fees are paid or charged-off. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent; based upon the level of risk indicated, a collection strategy is deployed. If after exhausting all in-house collection efforts the Company is unable to collect on the account, it may engage collection agencies or outside attorneys to continue those efforts, or sell the charged-off balances.

The following table presents the delinquency trends on the Company’s Credit card and other loans portfolio based on the amortized cost:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 days delinquent		61 to 90 days delinquent		91 or more days delinquent		Total delinquent		Current		Total
(Millions)
As of December 31, 2022	$	444	$	296	$	732	$	1,472	$	19,559	$	21,031

As of December 31, 2021	$	262	$	186	$	401	$	849	$	16,284	$	17,133

______________________________

(1)BNPL loan delinquencies have been included with credit card loan delinquencies in the table above, as amounts were insignificant as of each period presented. As permitted by GAAP, the Company excludes unbilled finance charges and fees from its amortized cost basis of Credit card and other loans. As of December 31, 2022 and 2021, again, accrued interest and fees that have not yet been billed to cardholders were $307 million and $224 million, respectively, included in Credit card and other loans on the Consolidated Balance Sheets.

From time to time the Company may re-age cardholders’ accounts, which is intended to assist delinquent cardholders who have experienced financial difficulties but who demonstrate both an ability and willingness to repay the amounts due; this practice affects credit card loan delinquencies and principal losses. Accounts meeting specific defined criteria are re-aged when the cardholder makes one or more consecutive payments aggregating to a certain pre-defined amount of their account balance. Upon re-aging, the outstanding balance of a delinquent account is returned to Current status. For the years ended December 31, 2022, 2021 and 2020, the Company’s re-aged accounts as a percentage of total Credit card and other loans represented 1.4%, 1.7% and 2.8%, respectively. The Company’s re-aging practices comply with regulatory guidelines.

Net Principal Losses

The Company’s net principal losses include the principal amount of losses that are deemed uncollectible, less recoveries, and exclude charged-off interest, fees and third-party fraud losses (including synthetic fraud). Charged-off interest and fees reduce Interest and fees on loans, while third-party fraud losses (including synthetic fraud) are recorded in Card and processing expenses. Credit card loans, including unpaid interest and fees, are generally charged-off in the month during which an account becomes 180 days past due. BNPL loans, including unpaid interest, are generally charged-off when a loan becomes 120 days past due. However, in the case of a customer bankruptcy or death, Credit card and other loans, including unpaid interest and fees as applicable, are charged-off in each month subsequent to 60 days after the receipt of notification of the bankruptcy or death, but in any case not later than 180 days past due for credit card loans and 120 days past due for BNPL loans. The Company records the actual losses for unpaid interest and fees as a reduction to Interest and fees on loans, which were $651 million, $456 million and $717 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Modified Credit Card Loans

Forbearance Programs

As part of the Company’s collections strategy, the Company may offer temporary, short term (six-months or less) forbearance programs in order to improve the likelihood of collections and meet the needs of the Company’s customers. The Company’s modifications for customers who have requested assistance and meet certain qualifying requirements, come in the form of reduced or deferred payment requirements, interest rate reductions and late fee waivers. The Company does not offer programs involving the forgiveness of principal. These temporary loan modifications may assist in cases where the Company believes the customer will recover from the short-term hardship and resume scheduled payments. Under these forbearance modification programs, those accounts receiving relief may not advance to the next delinquency cycle, including to charge-off, in the same time frame that would have occurred had the relief not been granted. The Company evaluates its forbearance modification programs to determine if they represent a more than insignificant delay in payment, in which case they would then be considered a troubled debt restructuring (TDR). Loans in these short term programs that are determined to be TDR’s, will be included as such in the disclosures below.

Credit Card Loans Modified as TDRs

The Company considers impaired loans to be loans for which it is probable that it will be unable to collect all amounts due according to the original contractual terms of the cardholder agreement, including credit card loans modified as TDRs. In instances where cardholders are experiencing financial difficulty, the Company may modify its credit card loans with the intention of minimizing losses and improving collectability, while providing cardholders with financial relief; such credit card loans are classified as TDRs, exclusive of the forbearance programs described above. Modifications, including for temporary hardship and permanent workout programs, include concessions consisting primarily of a reduced minimum payment, late fee waiver, and an interest rate reduction. The temporary programs’ concessions remain in place for a period no longer than twelve months, while the permanent programs remain in place through the payoff of the credit card loans if the cardholder complies with the terms of the program.

TDR concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments, and the cardholder’s ability to make future purchases is either limited, or suspended until the cardholder successfully exits from the modification program. In accordance with the terms of the Company’s temporary hardship and permanent workout programs, the credit agreement reverts back to its original contractual terms (including the contractual interest rate) when the customer exits the program, which is either when all payments have been made in accordance with the program, or when the customer defaults out of the program.

TDRs are collectively evaluated for impairment on a pooled basis in measuring the appropriate Allowance for credit losses. The Company’s impaired credit card loans represented 1% and 2% of total credit card loans for year ended December 31, 2022 and 2021, respectively. As of those same dates, the Company’s recorded investment in impaired credit card loans was $257 million and $281 million, respectively, with an associated Allowance for credit losses of $70 million and $81 million, respectively. The average recorded investment in impaired credit card loans was $257 million and $383 million for the year ended December 31, 2022 and 2021, respectively.

Interest income on these impaired credit card loans is accounted for in the same manner as non-impaired credit card loans, and cash collections are allocated according to the same payment hierarchy methodology applied for credit card loans not in modification programs. The Company recognized $15 million, $26 million and $30 million for the year ended December 31, 2022, 2021 and 2020, respectively, in interest income associated with credit card loans in modification programs, during the period that such loans were impaired.

The following table provides additional information regarding credit card loans modified as TDRs for the years ended December 31:


	2022					2021
	Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance		Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings	149,815	$	227	$	227	171,993	$	254	$	254

The following table provides additional information regarding credit card loans modified as TDRs that have subsequently defaulted within 12 months of their modification dates for the years ended December 31; the probability of default is factored into the Allowance for credit losses:


	2022			2021
	Number of Restructurings	Outstanding Balance		Number of Restructurings	Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings that subsequently defaulted	63,726	$	88	114,531	$	154

Credit Quality

Credit Card Loans

As part of the Company’s credit risk management activities, the Company assesses overall credit quality by reviewing information related to the performance of a credit cardholder’s account, as well as information from credit bureaus relating to the cardholder’s broader credit performance. The Company utilizes VantageScore (Vantage) credit scores to assist in its assessment of credit quality. Vantage credit scores are obtained at origination of the account and are refreshed monthly thereafter to assist in predicting customer behavior. The Company categorizes these Vantage credit scores into the following three credit score categories: (i) 661 or higher, which are considered the strongest credits and therefore have the lowest credit risk; (ii) 601 to 660, considered to have moderate credit risk; and (iii) 600 or less, which are considered weaker credits and therefore have the highest credit risk. In certain limited circumstances there are customer accounts for which a Vantage score is not available and the Company uses alternative sources to assess credit risk and predict behavior. The table below excludes 0.6% and 0.1% of the total credit card loans balance as of December 31, 2022 and 2021, respectively, representing those customer accounts for which a Vantage credit score is not available. The following table reflects the distribution of the Company’s credit card loans by Vantage score as of December 31:


	Vantage
	2022						2021
	661 or Higher		601 to 660		600 or Less		661 or Higher		601 to 660		600 or Less
Credit card loans	62	%	26	%	12	%	62	%	26	%	12	%

BNPL Loans

The amortized cost basis of the Company’s BNPL loans totaled $299 million and $182 million as of December 31, 2022 and 2021, respectively. As of December 31, 2022, approximately 86% of these loans were originated with customers with Fair Isaac Corporation (FICO) scores of 660 or above, and correspondingly approximately 14% of these loans were

originated with customers with FICO scores below 660. Similarly, as of December 31, 2021, approximately 84% and 16% of these loans were originated by customers with FICO scores of 660 or above, and below 660, respectively.

Unfunded Loan Commitments

The Company is active in originating private label and co-brand credit cards in the U.S. The Company manages potential credit risk in its unfunded lending commitments by reviewing each potential customer’s credit application and evaluating the applicant’s financial history and ability and perceived willingness to repay. Credit card loans are made primarily on an unsecured basis. Cardholders reside throughout the U.S. and are not significantly concentrated in any one geographic area.

The Company manages its potential risk in credit commitments by limiting the total amount of credit, both by individual customer and in total, by monitoring the size and maturity of its portfolios and applying consistent underwriting standards. The Company has the unilateral ability to cancel or reduce unused credit card lines at any time. Unused credit card lines available to cardholders totaled approximately $128 billion and $112 billion as of December 31, 2022 and 2021, respectively. While this amount represented the total available unused credit card lines, the Company has not experienced and does not anticipate that all cardholders will access their entire available line at any given point in time.

Portfolio Sales

In August 2021, the Company sold a credit card portfolio for cash consideration of approximately $512 million and recognized a gain of approximately $10 million on the transaction, which was recorded in Other non-interest income.

As of December 31, 2022 and December 31, 2021, there were no credit card loans held for sale and no portfolio sales were made during the year end December 31, 2022.

The Company previously announced the non-renewal of its contract with BJ’s and the sale of the BJ’s portfolio, which closed in late February 2023, for a total preliminary purchase price of approximately $2.5 billion on a loan portfolio of approximately $2.3 billion, subject to customary purchase price adjustments.

Portfolio Acquisitions

In April 2022, the Company acquired a credit card portfolio for cash consideration of approximately $249 million, which primarily consisted of credit card loans, and also included intangible assets (primarily purchased credit card relationships) and rewards liabilities. For Consolidated Financial Statement disclosure purposes, allocation of the purchase price to the credit card loans and intangible assets acquired is not significant.

In October 2022, the Company acquired the AAA credit card portfolio for cash consideration of approximately $1.6 billion, which primarily consisted of $1.5 billion of credit card loans, and also included $118 million of intangible assets (primarily purchased credit card relationships) and reward liabilities, and is subject to customary purchase price adjustments.

ALLOWANCE FOR CREDIT LOSSES

12 Months Ended

Dec. 31, 2022

Credit Loss [Abstract]

ALLOWANCE FOR CREDIT LOSSES

The Allowance for credit losses is an estimate of expected credit losses, measured over the estimated life of its Credit card and other loans that considers forecasts of future economic conditions in addition to information about past events and current conditions. The estimate under the credit reserving methodology referred to as the Current Expected Credit Loss (CECL) model is significantly influenced by the composition, characteristics and quality of the Company’s portfolio of credit card and other loans, as well as the prevailing economic conditions and forecasts utilized. The estimate of the Allowance for credit losses includes an estimate for uncollectible principal as well as unpaid interest and fees. Principal losses, net of recoveries are deducted from the Allowance. Principal losses for unpaid interest and fees as well as any adjustments to the Allowance associated with unpaid interest and fees are recorded as a reduction to Interest and fees on loans. The Allowance is maintained through an adjustment to the Provision for credit losses and is evaluated for appropriateness.

In estimating its Allowance for credit losses, for each identified group, management utilizes various models and estimation techniques based on historical loss experience, current conditions, reasonable and supportable forecasts and other relevant factors. These models utilize historical data and applicable macroeconomic variables with statistical analysis and

behavioral relationships, to determine expected credit performance. The Company’s quantitative estimate of expected credit losses under CECL is impacted by certain forecasted economic factors. The Company considers the forecast used to be reasonable and supportable over the estimated life of the credit card and other loans, with no reversion period. In addition to the quantitative estimate of expected credit losses, the Company also incorporates qualitative adjustments for certain factors such as Company-specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the Allowance for credit losses reflects the Company’s best estimate of current expected credit losses.

Credit Card Loans

The Company uses a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. The Company has evaluated multiple risk characteristics across its credit card loans portfolio, and determined delinquency status and credit quality to be the most significant characteristics for estimating expected credit losses. To estimate its Allowance for credit losses, the Company segments its credit card loans on the basis of delinquency status, credit quality risk score and product. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. In determining the estimated life of the Company’s credit card loans, payments were applied to the measurement date balance with no payments allocated to future purchase activity. The Company uses a combination of First In First Out and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) methodologies to model balance paydown.

BNPL Loans

The Company measures its Allowance for credit losses on BNPL loans using a statistical model to estimate projected losses over the remaining terms of the loans, inclusive of an assumption for prepayments. The model is based on the historical statistical relationship between loan loss performance and certain macroeconomic data pooled based on credit quality risk score, term of the underlying loans, vintage and geographic location. As of December 31, 2022 and 2021, the Allowance for credit losses on BNPL loans was $21 million and $14 million, respectively.

Allowance for Credit Losses Rollforward

The following table presents the Company’s Allowance for credit losses for its Credit card and other loans. With the acquisition of Lon, Inc. in December 2020, the Company acquired certain BNPL loans which represented a separate portfolio segment; the amount of the related Allowance for credit losses was insignificant and therefore has been included in the table below. The amounts presented are for the years ended December 31:


	2022		2021		2020
(Millions)
Beginning balance(1)	$	1,832	$	2,008	$	1,815

Provision for credit losses(2)	1,594		544		1,266
Change in estimate for uncollectible unpaid interest and fees	10		—		10
Net principal losses(3)	(972)		(720)		(1,083)
Ending balance	$	2,464	$	1,832	$	2,008

______________________________

(1)The 2020 Beginning balance includes an increase of $644 million as of January 1, 2020, related to the adoption of the CECL methodology.

(2)Provision for credit losses includes a build/release for the Allowance, as well as replenishment of Net principal losses.

(3)Net principal losses are presented net of recoveries of $187 million, $163 million and $205 million for the years ended December 31, 2022, 2021 and 2020, respectively. Net principal losses for the year ended December 31, 2022 include a $5 million adjustment related to the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency; no such adjustment was made in the comparative periods.

For the year ended December 31, 2022, the factors that influenced the increase in the Allowance for credit losses are a higher End-of-period credit card and other loan balance, a higher reserve rate due to economic scenario weightings in the

Company’s credit reserve modeling as a result of weakening in macroeconomic indicators, elevated inflation, and the increased cost of overall consumer debt.

SECURITIZATIONS

12 Months Ended

Dec. 31, 2022

Offsetting [Abstract]

SECURITIZATIONS

The Company accounts for transfers of financial assets as either sales or financings. Transfers of financial assets that are accounted for as sales are removed from the Consolidated Balance Sheets with any realized gain or loss reflected in the Consolidated Statements of Income during the period in which the sale occurs. Transfers of financial assets that are not accounted for as a sale are treated as a financing.

The Company regularly securitizes the majority of its credit card loans through the transfer of those loans to one of its Trusts. The Company performs the decision making for the Trusts, as well as servicing the cardholder accounts that generate the credit card loans held by the Trusts. In its capacity as a servicer, the Company administers the loans, collects payments and charges-off uncollectible balances. Servicing fees are earned by a subsidiary of the Company, which are eliminated in consolidation.

The Trusts are consolidated VIEs because they have insufficient equity at risk to finance their activities – being the issuance of debt securities and notes, collateralized by the underlying credit card loans. Because the Company performs the decision making and servicing for the Trusts, it has the power to direct the activities that most significantly impact the Trusts’ economic performance (the collection of the underlying credit card loans). In addition, the Company holds all of the variable interests in the Trusts, with the exception of the liabilities held by third-parties. These variable interests provide the Company with the right to receive benefits and the obligation to absorb losses, which could be significant to the Trusts. As a result of these considerations, the Company is deemed to be the primary beneficiary of the Trusts and therefore consolidates the Trusts.

The Trusts issue debt securities and notes, which are non-recourse to the Company. The collections on the securitized credit card loans held by the Trusts are available only for payment of those debt securities and notes, or other obligations arising in the securitization transactions. For its securitized credit card loans, during the initial phase of a securitization reinvestment period, the Company generally retains principal collections in exchange for the transfer of additional credit card loans into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.

The Company is required to maintain minimum interests in its Trusts ranging from 4% to 10% of the securitized credit card loans. This requirement is met through a transferor’s interest and is supplemented through excess funding deposits which represent cash amounts deposited with the trustee of the securitizations. Cash collateral, restricted deposits are generally released proportionately as investors are repaid. Under the terms of the Trusts, the occurrence of certain triggering events associated with the performance of the securitized credit card loans in each Trust could result in certain required actions, including payment of Trust expenses, the establishment of reserve funds, or early amortization of the debt securities and/or notes, in a worst-case scenario. During the years ended December 31, 2022, 2021 and 2020, no such triggering events occurred.

The following tables provide the total securitized credit card loans and related delinquencies as of December 31, and net principal losses of securitized credit card loans for the years ended December 31:


	2022		2021
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	15,383	$	11,215
Of which: principal amount of credit card loans 91 days or more past due	$	307	$	159


	2022		2021		2020
(Millions)
Net principal losses of securitized credit card loans	$	554	$	453	$	756

INVESTMENT SECURITIES

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

The Company’s investment securities consist of available-for-sale (AFS) securities, which are debt securities and mutual funds. The Company also holds equity securities within its investment securities portfolio. Collectively, these investments are carried at fair value on the Consolidated Balance Sheets within Investment securities.

For any AFS debt securities in an unrealized loss position, the CECL methodology requires estimation of the lifetime expected credit losses which then would be recognized in the Consolidated Statements of Income by establishing, or adjusting an existing allowance for those credit losses. The Company did not have any such credit losses for the periods presented. Any unrealized gains, or any portion of a security’s non-credit-related unrealized losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. The Company typically invests in highly-rated securities with low probabilities of default.

Gains and losses on investments in equity securities are recorded in Other non-interest expenses in the Consolidated Statements of Income.

Realized gains and losses are recognized upon disposition of the investment securities, using the specific identification method. The table below reflects unrealized gains and losses as of December 31, 2022 and December 31, 2021, respectively:


	2022								2021
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale securities	$	175	$	—	$	(23)	$	152	$	173	$	4	$	(2)	$	175
Equity securities	$	69	$	—	$	—	$	69	$	64	$	—	$	—	$	64
Total	$	244	$	—	$	(23)	$	221	$	237	$	4	$	(2)	$	239

The following tables provide information about the Company’s AFS debt securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2022 and December 31, 2021, respectively:


	December 31, 2022
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)
Total	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)


	December 31, 2021
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	57	$	(1)	$	15	$	(1)	$	72	$	(2)
Total	$	57	$	(1)	$	15	$	(1)	$	72	$	(2)

As of December 31, 2022, the amortized cost and estimated fair value of the Company’s AFS debt securities, which are mortgage-backed securities with no stated maturities, was $175 million and $152 million, respectively.

There were no realized gains or losses from the sale of any investment securities for the years ended December 31, 2022, 2021 and 2020.

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

Furniture, equipment, buildings and leasehold improvements are carried at cost less accumulated depreciation, and depreciation is measured on a straight-line basis. Costs incurred during construction are capitalized; depreciation begins once the asset is placed in service. As of December 31, 2022, the Company’s furniture and equipment has remaining estimated useful lives ranging from less than one year to 10 years. Leasehold improvements are depreciated over the lesser of the remaining terms of the respective leases, or the economic lives of the improvements, and range from less than one year to 16 years, as of December 31, 2022.

Costs associated with the acquisition or development of internal-use software are also capitalized and recorded in Property and equipment, net. Once the internal-use software is ready for its intended use, the cost is amortized on a straight-line basis over the software’s estimated useful life. As of December 31, 2022, the Company’s internal-use software has remaining estimated useful lives ranging from less than one year to 10 years.

The Company reviews long-lived assets and asset groups for impairment whenever events or circumstances indicate their carrying amounts may not be recoverable. An impairment is recognized if the carrying amount is not recoverable and exceeds the asset or asset group’s fair value.

Property and equipment consists of the following as of December 31:


	2022		2021
(Millions)
Internal-use computer software and development	$	305	$	263
Furniture and equipment	96		107
Land and leasehold improvements	72		76
Construction in progress	9		25
Total	482		471
Accumulated depreciation and amortization	(287)		(256)
Property and equipment	$	195	$	215

Depreciation expense totaled $19 million, $26 million and $57 million for the years ended December 31, 2022, 2021 and 2020, respectively, and includes purchased software. Amortization expense on capitalized internal-use software costs totaled $68 million, $37 million and $15 million for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022 and 2021, the net amount of unamortized capitalized internal-use software costs included in Property and equipment, net on the Consolidated Balance Sheets was $112 million and $113 million, respectively.

GOODWILL AND INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill is reviewed at least annually for impairment, or more frequently if circumstances indicate that an impairment is probable, using qualitative or quantitative analysis. No goodwill impairment has been recognized during any of the years ended December 31, 2022, 2021, or 2020.

The changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021, respectively, were as follows:


(Millions)
Balance as of December 31, 2020	$	634
Goodwill acquired during the period	—
Balance as of December 31, 2021	$	634
Goodwill acquired during the period	—
Balance as of December 31, 2022	$	634

______________________________

There were no accumulated goodwill impairment losses as of both December 31, 2022 and 2021.

Intangible Assets, net

The Company’s identifiable intangible assets consist of both amortizable and non-amortizable intangible assets. Definite-lived intangible assets are subject to amortization and are amortized on a straight-line basis over their estimated useful lives; indefinite-lived intangible assets are not amortized. The Company reviews long-lived assets and asset groups, including intangible assets, for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable; recognizing an impairment if the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. No impairment of intangible assets has been recognized during any of the years ended December 31, 2022, 2021, or 2020.

Intangible assets consist of the following as of December 31:


	2022
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(6)	$	3	3 years
Premium on purchased credit card loan portfolios	$	230	$	(73)	$	157	4-13 years
Non-compete agreements	$	2	$	(1)	$	1	5 years
	$	241	$	(80)	$	161
Indefinite-Lived Assets
Tradename	$	4	$	—	$	4	Indefinite life
Total intangible assets	$	245	$	(80)	$	165


	2021
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(3)	$	6	3 years
Premium on purchased credit card loan portfolios	133		(89)		44		1-13 years
Non-compete agreements	2		—		2		5 years
	$	144	$	(92)	$	52
Indefinite-Lived Assets
Tradename	1		—		1		Indefinite life
Total intangible assets	$	145	$	(92)	$	53

Amortization expense related to intangible assets was approximately $26 million, $29 million and $34 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows for the years ending December 31:


(Millions)
2023			41
2024			37
2025			29
2026			24
2027			8
Thereafter			22
			161

OTHER ASSETS

12 Months Ended

Dec. 31, 2022

Other Assets [Abstract]

OTHER ASSETS

The following is a summary of Other assets as of December 31:


	2022		2021
(Millions)
Deferred tax asset, net	$	552	$	302
Deferred contract costs	344		364
Accounts receivable, net (1)	164		151
Right-of-use assets - operating	88		97
Restricted cash (2)	36		877
Investment in Loyalty Ventures Inc. (LVI)	6		50
Other (3)	210		151
Total other assets	$	1,400	$	1,992

______________________________

(1)Primarily related to federal, state and foreign income tax receivables (including a tax-related receivable in the amount of $49 million, net, which the Company is entitled to receive through LVI), and amounts receivable from various brand partners.

(2)The balance as of December 31, 2021 represents principal accumulation for the repayment of debt issued by consolidated VIEs that matured in 2022.

(3)Primarily comprised of prepaid expenses and non-income-based tax receivables.

LEASES

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

LEASES

The Company has various operating leases for facilities and equipment which are recorded as lease-related assets (right-of-use assets) and liabilities for those leases with terms greater than 12 months. The Company does not have any finance leases. The Company determines if an arrangement is a lease or contains a lease at inception, and does not separate lease and non-lease components. Right-of-use assets are recognized as of the lease commencement date at amounts equal to the respective lease liabilities, adjusted for any prepaid lease payments, initial direct costs and lease incentives. The Company’s lease liabilities are recognized as of the lease commencement date, or upon modification of the lease, at the present value of the contractual fixed lease payments, discounted using the Company’s incremental borrowing rate as the rate implicit in the lease is typically not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.

As of both December 31, 2022 and 2021, the weighted average discount rate applied by the Company was 5.8%. As of December 31, 2022, the Company’s leases have remaining lease terms ranging from less than one year, up to 16 years, some of which may include renewal options, while the weighted average remaining lease term was 8.8 years and 9.8 years

as of December 31, 2022 and 2021, respectively. Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets; lease expense for these leases is recognized on a straight-line basis over the lease term.

As with other long-lived assets, right-of-use assets are reviewed for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable.

The components of lease expense were as follows for the years ended December 31:


	2022		2021		2020
(Millions)
Operating lease cost	$	17	$	23	$	25
Short-term lease cost	—		—		1
Variable lease cost	3		2		2
Sublease income	(7)		(5)		(1)
Total	$	13	$	20	$	27

Supplemental lease-related cash flow information was as follows for the years ended December 31:


	2022		2021		2020
(Millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23	$	25	$	28
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	5	$	1

Future, maturities of the Company’s lease liabilities, by year, were as follows as of December 31, 2022:


(Millions)
2023	$	19
2024	20
2025	19
2026	18
2027	16
Thereafter	70
Total undiscounted lease liabilities	162
Less: Amount representing interest	(36)
Total present value of minimum lease payments	$	126

DEPOSITS

12 Months Ended

Dec. 31, 2022

Other Liabilities Disclosure [Abstract]

DEPOSITS

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of December 31:


	2022		2021
(Millions)
Interest-bearing	$	13,787	$	11,027
Non-interest-bearing (including cardholder credit balances)	39		—
Total deposits	$	13,826	$	11,027

Deposits by deposit type were as follows as of December 31:


	2022		2021
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	2,782	$	1,713
Wholesale	3,954		3,873
Certificates of deposit
Direct-to-consumer (retail)	2,684		1,467
Wholesale	4,367		3,974
Cardholder credit balances	39		—
Total deposits	$	13,826	$	11,027

The scheduled maturities of certificates of deposit were as follows as of December 31, 2022:


(Millions)
2023(1)	$	4,437
2024	1,333
2025	482
2026	234
2027	565
Thereafter	—
Total certificates of deposit	$	7,051

__________________________________


(1)			The 2023 balance includes $9 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

As of December 31, 2022 and December 31, 2021, certificates of deposit that exceeded applicable FDIC insurance limits, which are generally $250,000 or more, in the aggregate, were $822 million and $500 million, respectively.

BORROWINGS OF LONG-TERM AND OTHER DEBT

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

BORROWINGS OF LONG-TERM AND OTHER DEBT

Long-term and other debt consisted of the following as of December 31:


Description	2022		2021		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	July 2024	(1)
Term loans	556		658		July 2024	(2)
Senior notes due 2024	850		850		December 2024	4.750%
Senior notes due 2026	500		500		January 2026	7.000%
Subtotal	1,906		2,008
Less: Unamortized debt issuance costs	14		22
Total long-term and other debt	$	1,892	$	1,986

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	—	$	1,572
Conduit asset-backed securities	6,115		3,883		Various – Jun 2023 to Oct 2023	(3)
Subtotal	6,115		5,455
Less: Unamortized debt issuance costs	—		2
Total debt issued by consolidated VIEs	$	6,115	$	5,453

Total borrowings of long-term and other debt	$	8,007	$	7,439

______________________________


(1)			The interest rate in 2022 is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin. The interest rate in 2021 is based upon the London Interbank Offered Rate (LIBOR) plus an applicable margin.


(2)			The interest rate in 2022 is based upon SOFR plus an applicable margin. The interest rate in 2021 is based upon LIBOR plus an applicable margin. The weighted average interest rate for the term loans was 3.24% and 1.85% as of December 31, 2022 and 2021, respectively.


(3)			The interest rate in 2022 is based upon SOFR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. The interest rate in 2021 is based upon LIBOR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. As of December 31, 2022, the interest rates ranged from 5.08% to 5.93%. As of December 31, 2021, the interest rates ranged from 0.89% to 0.96%.

Certain of the Company’s long-term debt agreements contain various restrictive financial and non-financial covenants. If the Company does not comply with these covenants, the maturity of amounts outstanding may be accelerated and become payable and the associated commitments may be terminated. As of December 31, 2022, the Company was in compliance with all such covenants.

Long-term and Other Debt

Credit Agreement

The Company, as borrower, and certain of its non-Bank wholly-owned subsidiaries, as guarantors, are party to a Credit Agreement with various agents and lenders dated June 14, 2017, as amended (the Credit Agreement). As of December 31, 2022, the Credit Agreement had $556 million aggregate principal amount of term loans outstanding (the term loans) and provided for a $750 million revolving credit facility (the revolving line of credit) which was undrawn as of December 31, 2022. The Credit Agreement matures on July 1, 2024.

The Credit Agreement contains the usual and customary negative and affirmative covenants, including, but not limited to, restrictions on the Company’s ability and in certain instances, its subsidiaries’ ability to consolidate or merge; substantially change the nature of its business; sell, lease, or otherwise transfer any substantial part of its assets; create or incur indebtedness; create liens; and make acquisitions. The negative covenants are subject to certain exceptions as specified in the Credit Agreement. The Credit Agreement also requires the Company to comply with certain financial covenants and

includes customary events of default. The Credit Agreement was amended in December 2022 to index borrowings SOFR, with the discontinuation of LIBOR. SOFR is based on short-term repurchase agreements that are backed by Treasury securities.

Senior Notes Due 2024 and 2026

The Senior Notes set forth below are each governed by their respective indenture that includes usual and customary negative covenants and events of default. These Senior Notes are unsecured and are guaranteed on a senior unsecured basis by certain of the Company’s existing and future domestic restricted subsidiaries that incurs or in any other manner becomes liable for any debt under the Company’s domestic credit facilities, including the Credit Agreement.

Due December 15, 2024: In December 2019, the Company issued and sold $850 million aggregate principal amount of 4.750% Senior Notes due December 15, 2024 (the Senior Notes due 2024). The Senior Notes due 2024 accrue interest on the outstanding principal amount at the rate of 4.750% per annum from December 20, 2019, payable semi-annually in arrears, on June 15 and December 15 of each year, beginning on June 15, 2020. The Senior Notes due 2024 will mature on December 15, 2024, subject to earlier repurchase or redemption.

Due January 15, 2026: In September 2020, the Company issued and sold $500 million aggregate principal amount of 7.000% Senior Notes due January 15, 2026 (the Senior Notes due 2026). The Senior Notes due 2026 accrue interest on the outstanding principal amount at the rate of 7.000% per annum from September 22, 2020, payable semi-annually in arrears, on March 15 and September 15 of each year, beginning on March 15, 2021. The Senior Notes due 2026 will mature on January 15, 2026, subject to earlier repurchase or redemption.

Debt Issued by Consolidated VIEs

An asset-backed security is a security whose value and income payments are derived from and collateralized by a specified pool of underlying assets – in the case of the Company, its credit card loans. The sale of the pool of underlying assets to general investors is accomplished through a securitization process. The Company regularly sells its credit card loans to its Trusts, which are consolidated by the Company. The liabilities of these consolidated VIEs include asset-backed securities for which creditors, or beneficial interest holders, do not have recourse to the general credit of the Company.

Asset-Backed Term Notes

For the year ended December 31, 2022, no asset-backed term notes were issued, and $1.6 billion of asset-backed term notes matured and were repaid, of which $74 million were previously retained by the Company and therefore eliminated from the Consolidated Balance Sheets.

Conduit Facilities

The Company maintained committed syndicated bank Conduit Facilities to support the funding of its credit card loans for its Trusts. Borrowings outstanding under each private Conduit Facility bear interest at a margin above SOFR, or the asset-backed commercial paper costs of each individual conduit provider.

During the year ended December 31, 2022, the Company obtained increased lender commitments under its Conduit Facilities of $2.1 billion and extended the various maturities to June 2023 and July 2023. Specifically, in April 2022, the World Financial Network Credit Card Master Trust III amended its 2009-VFC Conduit Facility, increasing the capacity from $225 million to $275 million and extending the maturity to July 2023. In addition, in April 2022, the World Financial Capital Master Note Trust amended its 2009-VFN Conduit Facility, increasing the capacity from $1.5 billion to $2.5 billion and extending the maturity to July 2023. In June 2022, the Comenity Capital Asset Securitization Trust was formed for the purpose of funding a portfolio acquisition completed in October 2022. The capacity was negotiated to be $1.0 billion and the maturity was set as June 2023.

As of December 31, 2022, total capacity under the Conduit Facilities was $6.5 billion, of which $6.1 billion had been drawn.

Maturities

The future principal payments for the Company’s long-term and other debt are as follows, as of December 31, 2022:


Year	Long-Term and Other Debt		Debt Issued by Consolidated VIEs		Total
(Millions)
2023	$	152	$	6,115	$	6,267
2024	1,254		—		1,254
2025	—		—		—
2026	500		—		500
2027	—		—		—
Thereafter	—		—		—
Total maturities	1,906		6,115		8,021
Unamortized debt issuance costs	(14)		—		(14)
	$	1,892	$	6,115	$	8,007

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

OTHER LIABILITIES

12 Months Ended

Dec. 31, 2022

Other Liabilities [Abstract]

OTHER LIABILITIES

The following is a summary of Other liabilities as of December 31:


	2022		2021
(Millions)
Accounts payable and other brand partner liabilities	$	398	$	291
Accrued liabilities (1)	306		314
Long-term tax reserves	306		313
Operating lease liabilities	126		140
Other(2)	173		136
Total other liabilities	$	1,309	$	1,194

______________________________

(1)Primarily related to accrued payroll and benefits, marketing, taxes and professional services expenses.

(2)Primarily comprised of long-term unearned revenue and cardholder liabilities.

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

12 Months Ended

Dec. 31, 2022

Other Non-Interest Income and Other Non-Interest Expenses [Abstract]

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSE

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

The following table provides the components of Other non-interest income for the years ended December 31:


	2022		2021		2020
(Millions)
Payment protection products	$	154	$	141	$	156
Loss from equity method investment	(44)		2		—
Other	4		13		21
Total other non-interest income	$	114	$	156	$	177

The following table provides the components of Other non-interest expenses for the years ended December 31:


	2022		2021		2020
(Millions)
Professional services and regulatory fees	$	142	$	136	$	114
Asset impairment charges	—		—		64
Other (1)	85		86		108
Total other non-interest expense	$	227	$	222	$	286

______________________________


(1)			Primarily related to occupancy expense and non-income based taxes.

FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is defined under GAAP as the price that would be required to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; with such transaction based on the principal market, or in the absence of a principal market the most advantageous market for the specific instrument. GAAP provides for a three-level fair value hierarchy that classifies the inputs to valuation techniques used to measure fair value, defined as follows:

Level 1: Inputs that are unadjusted quoted prices for identical assets or liabilities in active markets that the entity can access.

Level 2: Inputs, other than those included within Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Inputs that are unobservable (e.g., internally derived assumptions) and reflect an entity’s own estimates about estimates market participants would use in pricing the asset or liability based on the best information available under the circumstances. In particular, Level 3 inputs and valuation techniques involve judgment and as a result are not necessarily indicative of amounts the Company would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts.

The Company monitors the market conditions and evaluates the fair value hierarchy levels quarterly. For the years ended December 31, 2022 and 2021, there were no transfers into or out of Level 3, and no transfers between Levels 1 and 2.

The following table summarizes the carrying values and fair values of the Company’s financial assets and financial liabilities as of December 31:


	2022				2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	18,901	$	21,328	$	15,567	$	17,989
Investment securities	221		221		239		239
Financial liabilities
Deposits	13,826		13,731		11,027		11,135
Debt issued by consolidated VIEs	6,115		6,115		5,453		5,467
Long-term and other debt	1,892		1,759		1,986		2,053

Valuation Techniques Used in the Fair Value Measurement of Financial Assets and Financial Liabilities

Credit card and other loans, net: The Company’s Credit card and other loans are recorded at historical cost, less the Allowance for credit losses, on the Consolidated Balance Sheets. In estimating the fair values, the Company uses a discounted cash flow model (i.e., Level 3 inputs), primarily because a comparable whole loan sales market for similar loans does not exist, and therefore there is a lack of observable pricing inputs. The Company uses various internally derived inputs, including projected income, discount rates and forecasted write-offs; economic value attributable to future loans generated by the cardholder accounts is not included in the fair values.

Investment securities: Investment securities consist of AFS securities, which are debt securities and mutual funds, as well as equity securities, and are recorded at fair value on the Consolidated Balance Sheets. Quoted prices of identical or similar investment securities in active markets are used to estimate the fair values (i.e., Level 1 or Level 2 inputs).

Deposits: Money market and other non-maturity deposits carrying values approximate their fair values because they are short-term in duration and have no defined maturity. Certificates of deposit are recorded at their historical issuance cost on the Consolidated Balance Sheets, adjusted for unamortized fees, with fair value being estimated based on the currently observable market rates available to the Company for similar deposits with similar remaining maturities (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Debt issued by consolidated VIEs: The Company records debt issued by its consolidated VIEs at historical issuance cost on the Consolidated Balance Sheets, adjusted for unamortized fees, as well as premiums or discounts, as applicable. Interest payable is included within Other liabilities on the Consolidated Balance Sheets. Fair value is estimated based on the currently observable market rates available to the Company for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction (i.e., Level 2 inputs).

Long-term and other debt: The Company records its long-term and other debt at historical issuance cost on the Consolidated Balance Sheets, adjusted for unamortized fees, as well as premiums or discounts, as applicable. Interest payable is included within Other liabilities on the Consolidated Balance Sheets. The fair value is estimated based on the currently observable market rates available to the Company for similar debt instruments with similar remaining maturities, or quoted market prices for the same transaction (i.e., Level 2 inputs).

The following tables summarize the Company’s financial assets and financial liabilities measured at fair value on a recurring basis, categorized by the fair value hierarchy described in the preceding paragraphs, as of December 31:


	2022
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	221	$	44	$	177	$	—
Total assets measured at fair value	$	221	$	44	$	177	$	—


	2021
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	239	$	48	$	191	$	—
Total assets measured at fair value	$	239	$	48	$	191	$	—

Financial Instruments Disclosed but Not Carried at Fair Value

The following tables summarize the Company’s financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of December 31, 2022 and 2021. The fair values of these financial instruments are estimates as of December 31, 2022 and 2021, and require management’s judgment; therefore, these figures may not be indicative of future fair values, nor can the fair value of the Company be estimated by aggregating all of the amounts presented.


	2022
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	21,328	$	—	$	—	$	21,328
Total	$	21,328	$	—	$	—	$	21,328

Financial liabilities:
Deposits	$	13,731	$	—	$	13,731	$	—
Debt issued by consolidated VIEs	6,115		—		6,115		—
Long-term and other debt	1,759		—		1,759		—
Total	$	21,605	$	—	$	21,605	$	—


	2021
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	17,989	$	—	$	—	$	17,989
Total	$	17,989	$	—	$	—	$	17,989

Financial liabilities:
Deposits	$	11,135	$	—	$	11,135	$	—
Debt issued by consolidated VIEs	5,467		—		5,467		—
Long-term and other debt	2,053		—		2,053		—
Total	$	18,655	$	—	$	18,655	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property and equipment, right-of-use assets, deferred contract assets, goodwill and intangible assets. These assets are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances, such as upon impairment. For the year ended December 31, 2022, the Company recognized a write-down of its equity method investment in LVI of $44 million; as of December 31, 2022, the carrying amount of its investment was $6 million and the fair value was $11 million. The Company did not have any impairments for the year ended December 31, 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Regulatory Matters

CB is regulated, supervised and examined by the State of Delaware and the Federal Deposit Insurance Corporation (FDIC). The Company’s industrial bank, CCB, is regulated, supervised and examined by the State of Utah and the FDIC.

The Consumer Financial Protection Bureau (CFPB) promulgates regulations for the federal consumer financial protection laws and supervises and examines large banks (those with more than $10 billion of total assets) with respect to those laws. Banks in a multi-bank organization, such as CB and CCB, are subject to supervision and examination by the CFPB with respect to the federal consumer financial protection laws if at least one bank reports total assets over $10 billion for four consecutive quarters. While the Banks were subject to supervision and examination by the CFPB with respect to the federal consumer financial protection laws between 2016 and 2021, this reverted to the FDIC in 2022. However, CCB’s total assets then exceeded $10 billion for four consecutive quarters as of September 30, 2022, and both Banks are now again subject to supervision and examination by the CFPB with respect to federal consumer protection laws.

Quantitative measures established by regulations to ensure capital adequacy require CB and CCB to maintain minimum amounts and ratios of Tier 1 capital to average assets, Common equity tier 1, Tier 1 capital and Total capital, all to risk weighted assets. Failure to meet these minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions by the Banks’ regulators that if undertaken, could have a direct material effect on CB’s and/or CCB’s operating activities, as well as those of the Company. Based on these regulations, as of December 31, 2022 and 2021, each Bank met all capital requirements to which it was subject, and maintained capital ratios in excess of the minimums required to qualify as well capitalized. The Banks are considered well capitalized and seek to maintain capital levels and ratios in excess of the minimum regulatory requirements inclusive of the 2.5% Capital Conservation Buffer. The actual capital ratios and minimum ratios for each Bank, as well as the Combined Banks, are as follows as of December 31, 2022:


	Actual Ratio		Minimum Ratio for Capital Adequacy Purposes		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
Comenity Bank
Common Equity Tier 1 capital ratio(1)	18.4	%	4.5	%	6.5	%
Tier 1 capital ratio(2)	18.4		6.0		8.0
Total Risk-based capital ratio(3)	19.7		8.0		10.0
Tier 1 Leverage capital ratio(4)	16.7		4.0		5.0

Comenity Capital Bank
Common Equity Tier 1 capital ratio(1)	16.1	%	4.5	%	6.5	%
Tier 1 capital ratio(2)	16.1		6.0		8.0
Total Risk-based capital ratio(3)	17.4		8.0		10.0
Tier 1 Leverage capital ratio(4)	14.9		4.0		8.0

Combined Banks
Common Equity Tier 1 capital ratio(1)	17.0	%	4.5	%	6.5	%
Tier 1 capital ratio(2)	17.0		6.0		8.0
Total Risk-based capital ratio(3)	18.3		8.0		10.0
Tier 1 Leverage capital ratio(4)	15.6		4.0		5.0

(1)The Common Equity Tier 1 capital ratio represents common equity tier 1 capital divided by total risk-weighted assets.

(2)The Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets.

(3)The Total Risk-based capital ratio represents total capital divided by total risk-weighted assets.

(4)The Tier 1 Leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

Indemnification

On July 1, 2019, the Company completed the sale of its Epsilon segment to Publicis Groupe S.A. (Publicis). Under the terms of the agreement governing that transaction, the Company agreed to indemnify Publicis and its affiliates from and against any losses arising out of or related to a U.S. Department of Justice (DOJ) investigation. The DOJ investigation related to third-party marketers who sent, or allegedly sent, deceptive mailings and the provision of data and services to those marketers by Epsilon’s data practice. Epsilon actively cooperated with the DOJ in connection with the investigation. On January 19, 2021, Epsilon entered into a deferred prosecution agreement (DPA) with the DOJ to resolve the matters that were the subject of the investigation. Pursuant to the DPA, Epsilon agreed, among other things, to pay penalties and consumer compensation in the aggregate amount of $150 million, to be paid in two equal installments, the first in January 2021 and the second in January 2022. A $150 million loss contingency was recorded as of December 31, 2020. Pursuant to

its contractual indemnification obligation, in January 2021 the Company paid $75 million to Publicis, and in January 2022 the Company paid the remaining $75 million installment to Publicis.

Legal Proceedings

From time to time the Company is involved in various claims and lawsuits and other proceedings, arising in the ordinary course of business that it believes will not have a material adverse effect on its business, consolidated financial condition or liquidity, including claims and lawsuits alleging breaches of the Company’s contractual obligations, arbitrations, class actions and other litigation, arising in connection with its business activities. The Company is also involved, from time to time, in reviews, investigations, subpoenas, supervisory actions and other proceedings (both formal and informal) by governmental agencies regarding its business, which could subject the Company to significant fines, penalties, obligations to change its business practices, significant restrictions on its existing business or ability to develop new business, cease-and-desist orders, safety-and-soundness directives or other requirements resulting in increased expenses, diminished income and damage to the Company’s reputation.

EMPLOYEE BENEFIT PLANS	12 Months Ended
EMPLOYEE BENEFIT PLANS	Dec. 31, 2022
Retirement Benefits [Abstract]
EMPLOYEE BENEFIT PLANS	EMPLOYEE BENEFIT PLANS Employee Stock Purchase Plan In March 2015, the Company’s Board of Directors adopted the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which was subsequently approved by the Company’s stockholders on June 3, 2015. The 2015 ESPP became effective July 1, 2015 with no definitive expiration date. The Company’s Board of Directors may at any time and for any reason terminate or amend the 2015 ESPP. No employee may purchase more than $25,000 worth of stock under the 2015 ESPP in any calendar year, and no employee may purchase stock under the 2015 ESPP if such purchase would cause the employee to own more than 5% of the voting rights or value of the Company’s common stock. The 2015 ESPP provides for six-month offering periods, commencing on the first trading day of the first and third calendar quarter of each year and ending on the last trading day of each subsequent calendar quarter. The purchase price of the common stock upon exercise is 85% of the fair market value of shares on the applicable purchase date as determined by averaging the high and low trading prices of the last trading day of each six-month period as defined above. An employee elects to participate and have contributions deducted through payroll deductions. The 2015 ESPP provides for the issuance of any remaining shares available for issuance under the 2005 ESPP, which were 441,327 shares at June 30, 2015. The 2015 ESPP reserved an additional 1,000,000 shares of the Company’s common stock for issuance under the 2015 Plan, bringing the maximum number of shares reserved for issuance under the 2015 ESPP to 1,441,327 shares, subject to adjustment as provided in the 2015 ESPP. During the year ended December 31, 2022, the Company issued 100,951 shares of common stock under the 2015 ESPP at a weighted-average issue price of $31.48. Since its adoption on July 1, 2015, 672,776 shares of common stock have been issued, with 768,551 shares available for issuance under the 2015 ESPP. 401(k) Retirement Savings Plan The Bread Financial Holdings, Inc. 401(k) and Retirement Savings Plan (the RSP) is a defined contribution plan that is qualified under Section 401(k) of the Internal Revenue Code of 1986. The Company amended the RSP effective December 3, 2020. The RSP is an IRS-approved safe harbor plan design that eliminates the need for most discrimination testing. Eligible employees can participate in the RSP immediately upon joining the Company and after 180 days of employment begin receiving company matching contributions; “seasonal” or “on-call” employees must complete a year of eligibility service before they may participate. The RSP covers U.S. employees of Bread Financial Holdings, Inc. who are at least 18 years old, one of the Company’s wholly-owned subsidiaries, and any other subsidiary or affiliated organization that adopts the RSP; employees of the Company and all of its U.S. subsidiaries are currently covered. The RSP permits eligible employees to make Roth elective deferrals, which are included in the employee’s taxable income at the time of contribution, but not when distributed. Regular, or Non-Roth elective deferrals made by employees, together with contributions by the Company to the RSP, and income earned on these contributions, are not taxable until withdrawn from the RSP. The Company matches an employee’s contribution dollar-for-dollar up to five percent of the employee’s eligible compensation; all Company matching contributions immediately vest. For the years ended December 31, 2022, 2021 and 2020, Company matching contributions were $17 million, $15 million and $16 million, respectively. Participants in the RSP can direct their contributions and the Company’s matching contribution to numerous investment options, including the Company’s common stock. On July 20, 2001, the Company registered 1,500,000 shares of its common stock for issuance in accordance with the RSP pursuant to a Registration Statement on Form S-8, File No. 333-65556. As of December 31, 2022, 241,603 of such shares remain available for issuance. Executive Deferred Compensation Plan The Company also maintains an Executive Deferred Compensation Plan (EDCP). The EDCP permits a defined group of management and highly compensated employees to defer on a pre-tax basis a portion of their base salary and incentive compensation (as defined in the EDCP) payable for services rendered. Deferrals under the EDCP are unfunded and subject to the claims of the Company’s creditors. Each participant in the EDCP is 100% vested in their account, and account balances accrue interest at a rate established and adjusted periodically by the Compensation & Human Capital committee of the Company’s Board of Directors. As of December 31, 2022 and 2021, the Company’s outstanding liability related to the EDCP, which was included in Other liabilities on the Consolidated Balance Sheets, was $20 million and $18 million, respectively.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2022

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in each component of accumulated other comprehensive loss, net of tax effects, are as follows:


	Net Unrealized Gains (Losses) on AFS Securities		Net Unrealized Losses on Cash Flow Hedges		Net Unrealized Losses on Net Investment Hedge		Foreign Currency Translation Losses (1)		Accumulated Other Comprehensive Loss
(Millions)
Balance as of January 1, 2020	$	2	$	—	$	(7)	$	(95)	$	(100)
Changes in other comprehensive income (loss)	21		(1)		—		71		91
Recognition resulting from the sale of Precima's foreign subsidiaries	—		—		—		4		4
Balance as of December 31, 2020	$	23	$	(1)	$	(7)	$	(20)	$	(5)
Changes in other comprehensive (loss) income	(21)		2		—		(37)		(56)
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries	(1)		(1)		7		54		59
Balance as of December 31, 2021	$	1	$	—	$	—	$	(3)	$	(2)
Changes in other comprehensive (loss) income	(19)		—		—		—		(19)

Balance as of December 31, 2022	$	(18)	$	—	$	—	$	(3)	$	(21)

______________________________

(1)Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates from the Company’s former LoyaltyOne segment, which was spun off in November 2021.

With the spinoff of the Company’s former LoyaltyOne segment on November 5, 2021, the $7 million net unrealized loss on its net investment hedge related to its net investment in BrandLoyalty was reclassified into net income. Upon the sale of Precima on January 10, 2020, $4 million of accumulated foreign currency translation adjustments attributable to Precima’s foreign subsidiaries sold were reclassified from Accumulated other comprehensive loss and included in the calculation of the gain on the sale of Precima.

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Stock Repurchase Programs

On February 28, 2022, the Company’s Board of Directors approved a stock repurchase program to acquire up to 200,000 shares of the Company’s outstanding common stock in the open market during the one-year period ending on February 28, 2023. As of March 31, 2022, the Company had repurchased all 200,000 shares of its common stock available under this program for an aggregate of $12 million. Following their repurchase, these 200,000 shares ceased to be outstanding shares of common stock and are now treated as authorized but unissued shares of common stock.

Stock Compensation Plans

The Company has adopted equity compensation plans to advance the interests of the Company by rewarding certain employees for their contributions to the financial success of the Company and thereby motivating them to continue to make such contributions in the future.

The 2015 Omnibus Incentive Plan (the 2015 Plan) became effective July 1, 2015, subsequently expired on June 30, 2020, and reserved 5,100,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock unit awards (RSUs), performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants who performed services for the Company or its affiliates, with only employees eligible to receive incentive stock options.

The 2020 Omnibus Incentive Plan (the 2020 Plan) became effective July 1, 2020 and reserved 2,400,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, RSUs, performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants performing services for the Company or its affiliates, with only employees being eligible to receive incentive stock options. The 2020 Plan expires on June 30, 2030; provided that, pursuant to the terms of the 2022 Plan (as defined below), no new grants shall be made under the 2020 Plan.

In March 2022, the Company’s Board of Directors adopted the 2022 Omnibus Incentive Plan (the 2022 Plan), which was subsequently approved by the Company’s stockholders on May 24, 2022. The 2022 Plan became effective July 1, 2022 and expires on June 30, 2032. The 2022 Plan reserves 3,075,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, RSUs, performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants performing services for the Company or its affiliates, with only employees being eligible to receive incentive stock options. The maximum amount that may be awarded to any independent member of the Company’s Board of Directors in any one calendar year may not exceed $1 million. On June 22, 2022, the Company registered 3,075,000 shares of its common stock for issuance in accordance with the 2022 Plan pursuant to a Registration Statement on Form S-8, File No. 333-265771. Terms of all awards under the 2022 Plan are determined by the Board of Directors or the Compensation & Human Capital Committee of the Board of Directors or its designee at the time of award.

Stock Compensation Expense

Stock-based compensation expense is measured at the grant date of the award, based on the fair value of the award, and is recognized ratably over the requisite service period. Stock-based compensation expense recognized in Employee compensation and benefits expense in the Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020 was $32 million, $25 million and $15 million, respectively, with corresponding income tax benefits of $5 million, $4 million and $3 million, respectively.

As the amount of stock-based compensation expense recognized is based on awards ultimately expected to vest, the amount recognized in the Company’s Consolidated Statements of Income has been reduced for estimated forfeitures. The Company estimates forfeitures at each grant date based on historical experience, with forfeiture estimates to be revised, if necessary, in subsequent periods should actual forfeitures differ from those estimates; forfeitures were estimated at 5% for each of the years ended December 31, 2022, 2021 and 2020.

As of December 31, 2022, there was approximately $55 million of unrecognized expense, adjusted for estimated forfeitures, related to non-vested, stock-based equity awards granted to employees, which is expected to be recognized over a weighted average remaining period of approximately 2.2 years.

Restricted Stock Unit Awards

The following table summarizes RSUs activity under the Company’s equity compensation plans:


	Market- Based (1)	Performance- Based (1)	Service- Based	Total	Weighted Average Fair Value
Balance as of January 1, 2020	24,288	230,272	258,572	513,132	$	172.06
Shares granted	20,770	219,186	241,610	481,566	89.11
Shares vested	—	(42,097)	(127,921)	(170,018)	175.09
Shares forfeited	(22,831)	(186,135)	(38,447)	(247,413)	166.93
Balance as of December 31, 2020	22,227	221,226	333,814	577,267	$	103.89
Shares granted (2)	2,641	111,542	774,062	888,245	88.18
Shares vested	—	(24,677)	(167,723)	(192,400)	118.78
Shares forfeited	(5,801)	(216,675)	(291,201)	(513,677)	93.16
Balance as of December 31, 2021	19,067	91,416	648,952	759,435	$	89.14
Shares granted	—	82,513	766,178	848,691	63.22
Shares vested	—	(8,983)	(218,077)	(227,060)	78.23
Shares forfeited	(19,067)	—	(89,390)	(108,457)	65.83
Balance as of December 31, 2022	—	164,946	1,107,663	1,272,609	$	68.86
Outstanding and Expected to Vest				1,238,212	$	69.17

______________________________


(1)			Shares granted reflect a 100% target attainment of the respective market-based or performance-based metric. Shares forfeited include those restricted stock units forfeited as a result of the Company not meeting the respective market-based or performance-based metric conditions.


(2)			Shares granted reflect a November 2021 make-whole equity adjustment to unvested shares due to the reduction in the Company’s share value resulting from the spinoff of LVI. This adjustment increased shares granted by 2,641 shares, 12,659 shares and 96,556 shares for market-based, performance-based and service-based awards, respectively. These shares were excluded from the weighted average fair value calculation.

For performance-based and service-based awards, the fair value of the RSUs was estimated using the Company’s closing share price on the date of grant. Service-based RSUs typically vest ratably over a three year period. Performance-based RSUs typically cliff vest at the end of three years, if specified performance measures tied to the Company’s financial performance are met, which are measured annually over the three year period. For the performance-based RSUs awarded in 2022 and 2021, the pre-defined vesting criteria typically permit a range from 0% to 150% to be earned. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition.

The total fair value of RSUs vested was $18 million, $23 million and $30 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the aggregate intrinsic value of RSUs outstanding and expected to vest was $47 million.

Dividends

For the years ended December 31, 2022, 2021 and 2020, the Company paid $43 million, $42 million and $61 million, respectively, in dividends to its shareholders of common stock. On January 26, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.21 per share on its common stock, payable on March 17, 2023, to stockholders of record at the close of business on February 10, 2023.

Treasury Stock

On July 30, 2021, the Company retired its 67.4 million shares of treasury stock outstanding, which increased Treasury stock by $6,733 million, reduced Retained earnings by $5,453 million, reduced Additional paid-in capital by $1,280 million and reduced Common stock by an immaterial amount, with no impact to total stockholders’ equity, on the Consolidated Balance Sheets.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

INCOME TAXES

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

The Company files income tax returns in federal, state, local and foreign jurisdictions, as applicable. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions.

Differences between the Consolidated Financial Statements and tax bases of assets and liabilities give rise to deferred tax assets and liabilities, which measure the future tax effects of items recognized in the Consolidated Financial Statements. Changes in deferred income tax assets and liabilities associated with components of Other comprehensive (loss) income are charged or credited directly to Other comprehensive (loss) income. Otherwise, changes in deferred income tax assets and liabilities are included as a component of Provision for income taxes. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates are charged or credited to Provision for income taxes in the period of enactment.

Deferred tax assets require certain estimates and judgments in order to determine whether it is more likely than not that all or a portion of the benefit of a deferred tax asset will not be realized. In evaluating the Company’s deferred tax assets on a quarterly basis as new facts and circumstances emerge, the Company analyzes and estimates the impact of future taxable income, reversing temporary differences and available tax planning strategies. Uncertainties can lead to changes in the ultimate realization of deferred tax assets. A liability for unrecognized tax benefits, representing the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized in the Consolidated Financial Statements, inherently requires estimates and judgments. A tax position is recognized only when it is more likely than not to be sustained, based purely on its technical merits after examination by the relevant taxing authority, and the amount recognized is the benefit the Company believes is more likely than not to be realized upon ultimate settlement. The Company evaluates its tax positions as new facts and circumstances become available, making adjustments to unrecognized tax benefits as appropriate. Uncertainties can mean the tax benefits ultimately realized differ from amounts previously recognized, with any differences recorded in Provision for income taxes, along with amounts for estimated interest and penalties related to uncertain tax positions.

The components of the Company’s Provision for income taxes included in the Consolidated Statements of Income were as follows for the years ended December 31:


	2022		2021		2020
(Millions)
Current
Federal	$	280	$	218	$	228
State	41		49		36
Total current income tax expense	321		267		264
Deferred
Federal	(201)		(13)		(143)
State	(44)		(7)		(28)
Total deferred income tax benefit	(245)		(20)		(171)
Total Provision for income taxes	$	76	$	247	$	93

A reconciliation of the Company’s expected income tax expense computed by applying the federal statutory rate to income from continuing operations before income taxes, to the recorded Provision for income taxes, is as follows for the years ended December 31:


	2022		2021		2020
(Millions)
Expected expense at statutory rate	$	63	$	219	$	63
(Decrease) increase in income taxes resulting from:
State and local income taxes, net of federal benefit	(2)		33		6
Impact of 2017 Tax Reform	—		(8)		(2)
Non-deductible expenses	6		4		6
IRC Section 199, net of tax reserves	4		—		12
Basis difference in unconsolidated subsidiaries	(8)		—		—
Valuation allowance	16		—		—
Other	(3)		(1)		8
Total	$	76	$	247	$	93

For the year ended December 31, 2022, the Company increased its reserve for Internal Revenue Code (IRC) Section 199 deductions by approximately $4 million as a result of an unfavorable court ruling. In addition, the Company recorded an income tax benefit (deferred tax asset) of approximately $8 million related to the initial recognition of the basis difference in an unconsolidated subsidiary, against which the Company recorded a $16 million valuation allowance as of December 31, 2022.

H.R. 1, originally known as the Tax Cuts and Jobs Act of 2017 (the 2017 Tax Reform) was enacted on December 22, 2017 and permanently reduced the corporate tax rate to 21% from 35%, effective January 1, 2018. For the year ended December 31, 2021, the Company recorded an income tax benefit of approximately $8 million related to the 2017 Tax Reform rate differential that was released from Other comprehensive (loss) income due to the divestiture of the Company’s former LoyaltyOne segment.

For the year ended December 31, 2020, the Company recorded an income tax benefit of approximately $2 million related to the rate benefit for a capital loss that will be carried back to a year preceding the 2017 Tax Reform rate reduction. The Company is currently under audit with the Internal Revenue Service and as a result of the preliminary audit findings, the Company increased its reserve for IRC Section 199 deductions by $12 million during the year ended December 31, 2020.

On August 16, 2022, the Inflation Reduction Act (the Act) was signed into law in the U.S., which includes a new 15 percent corporate minimum tax on certain large corporations and a one percent excise tax on stock repurchases made after December 31, 2022. The Company does not anticipate the Act will have a significant impact on its financial position, results of operations or cash flows, nor does it expect significant changes to operational processes, controls or governance as a result of the Act.

The following table reflects the significant components of Deferred tax assets and liabilities as of December 31:


	2022		2021
(Millions)
Deferred tax assets
Deferred revenue	$	14	$	17
Allowance for credit losses	598		447
Net operating loss carryforwards and other carryforwards	39		42
Operating lease liabilities	30		33
Accrued expenses and other	88		65
Total deferred tax assets	769		604
Valuation allowance	(26)		(8)
Deferred tax assets, net of valuation allowance	743		596
Deferred tax liabilities
Deferred income	$	148	$	221
Depreciation	7		28
Right of use assets	20		22
Intangible assets	16		23
Total deferred tax liabilities	191		294

Net deferred tax assets	$	552	$	302

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	552	$	302

As of December 31, 2022, included in the Company’s U.S. tax returns are approximately $124 million of U.S. federal net operating loss carryovers (NOLs) and approximately $34 million of foreign tax credits. With the exception of NOLs generated after December 31, 2017, these attributes expire at various times through the year 2037. As of December 31, 2022, the Company has state NOLs of approximately $231 million and state credits of approximately $2 million, both available to offset future state taxable income, and state capital losses of approximately $7 million to offset capital gains. The state NOLs, credits and capital losses will expire at various times through the year 2040.

The Company uses the portfolio approach relating to the release of stranded tax effects recorded in Accumulated other comprehensive loss. Under the portfolio approach, the net unrealized gains or losses recorded in Accumulated other comprehensive loss would be eliminated only on the date the entire portfolio of Available-for-sale investment securities is sold or otherwise disposed of.

The following table presents changes in unrecognized tax benefits:


(Millions)
Balance as of January 1, 2020	$	215
Increases related to prior years’ tax positions	59
Decreases related to prior years’ tax positions	(23)
Increases related to current year tax positions	11
Settlements during the period	(5)
Lapses of applicable statutes of limitation	(2)
Balance as of December 31, 2020	$	255
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(13)
Increases related to current year tax positions	12
Settlements during the period	(8)
Balance as of December 31, 2021	$	247
Increases related to prior years’ tax positions	8
Decreases related to prior years’ tax positions	(25)
Increases related to current year tax positions	14
Settlements during the period	(2)
Balance as of December 31, 2022	$	242

The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in Provision for income taxes. The Company has potential cumulative interest and penalties with respect to unrecognized tax benefits of approximately $74 million, $76 million and $69 million as of December 31, 2022, 2021 and 2020, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company recorded approximately a $1 million benefit and $8 million and $9 million expense, respectively, in Provision for income taxes for potential interest and penalties for unrecognized tax benefits.

As of December 31, 2022, 2021 and 2020, the Company had unrecognized tax benefits of approximately $238 million, $241 million and $243 million, respectively, that, if recognized, would impact the effective tax rate. The Company does not anticipate a significant change to the total amount of unrecognized tax benefits over the next twelve months.

The Company files income tax returns in U.S. federal, state and foreign jurisdictions, as applicable. With some exceptions, the tax returns filed by the Company are no longer subject to U.S. federal income tax, and state and local examinations for the years before 2015, or foreign income tax examinations for years before 2018.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHAREBasic earnings (losses) per share (EPS) is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of stock options, unvested restricted stock awards, or other dilutive securities. Diluted EPS is based on the weighted average number of common and potentially dilutive common shares (dilutive stock options, unvested restricted stock awards and other dilutive securities outstanding during the year) pursuant to the Treasury Stock method.

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the years ended December 31:


	2022		2021		2020
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	224	$	797	$	208
(Loss) income from discontinued operations, net of income taxes	(1)		4		6
Net income	$	223	$	801	$	214

Denominator
Basic: Weighted average common stock	49.9		49.7		47.8
Weighted average effect of dilutive securities
Net effect of dilutive unvested restricted stock awards (1)	0.1		0.3		0.1
Denominator for diluted calculation	50.0		50.0		47.9

Basic EPS
Income from continuing operations	$	4.48	$	16.02	$	4.36
(Loss) income from discontinued operations, net of income taxes	$	(0.01)	$	0.07	$	0.11
Net income	$	4.47	$	16.09	$	4.47

Diluted EPS
Income from continuing operations	$	4.47	$	15.95	$	4.35
(Loss) income from discontinued operations, net of income taxes	$	(0.01)	$	0.07	$	0.11
Net income	$	4.46	$	16.02	$	4.46

______________________________

(1)For the years ended December 31, 2022, 2021 and 2020, an insignificant amount of restricted stock awards were excluded from each calculation of weighted average dilutive common shares as the effect would have been anti-dilutive.

SUPPLEMENTAL CASH FLOW INFORMATION

12 Months Ended

Dec. 31, 2022

Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

The Consolidated Statements of Cash Flows are presented with the combined cash flows from continuing and discontinued operations. The following table provides a reconciliation of cash and cash equivalents to the total of the amounts reported in the Consolidated Statements of Cash Flows as of December 31:


	2022		2021
(Millions)
Cash and Cash Equivalents	$	3,891	$	3,046
Restricted Cash included within Other Assets	36		877
Total cash, cash equivalents and restricted cash	$	3,927	$	3,923

Non-cash investing and financing activities for the year ended December 31, 2021 included the Company’s equity method investment in LVI upon spinoff, on November 5, 2021, which totaled $48 million, and the Company’s retirement of its outstanding treasury stock in July 2021. For more information, see Note 22, “Discontinued Operations”, and Note 18, “Stockholders’ Equity”, respectively.

DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS AND BANK HOLDING COMPANY FINANCIAL PRESENTATION

DISCONTINUED OPERATIONS

LoyaltyOne

On November 5, 2021, the separation of LVI from the Company was completed after market close (the Separation). The Separation, which has been classified as discontinued operations, was achieved through the Company’s distribution of 81% of the shares of LVI common stock to holders of the Company’s common stock as of the close of business on the record date of October 27, 2021. The Company’s stockholders of record received one share of LVI common stock for every two and a half shares of the Company’s common stock. Following this distribution, LVI became an independent, publicly-traded company, in which the Company has retained a 19% ownership interest.

The Company accounts for its 19% ownership interest in LVI following the equity method of accounting. As of December 31, 2022, the carrying amount of the Company’s ownership interest in LVI, which totaled $6 million, is included in Other assets in the Consolidated Balance Sheets, while earnings (losses) are recorded in Other non-interest income in the Consolidated Statements of Income.

The following table summarizes the results of operations of the Company’s former LoyaltyOne segment, direct costs identifiable to the former LoyaltyOne segment, and the allocation of interest expense on corporate debt, for the years ended December 31:


	2022		2021		2020
(Millions)
Total interest income	$	—	$	1	$	1
Total interest expense (1)	—		11		17
Net interest income	—		(10)		(16)
Total non-interest income	—		574		765
Total non-interest expenses	1		519		656
Income before provision from income taxes	(1)		45		93
Provision for income taxes	—		36		6
Income from discontinued operations, net of income taxes	$	(1)	$	9	$	87

______________________________


(1)			The Company’s Credit Agreement, as amended, required a $725 million prepayment of term loans in conjunction with the LoyaltyOne spinoff. As a result, the interest expense reflected above is the allocation to discontinued operations of interest on the basis of this $725 million mandatory prepayment.

The following table summarizes the depreciation and amortization, and capital expenditures of the Company’s former LoyaltyOne segment for the years ended December 31:


	2022		2021		2020
(Millions)
Depreciation and amortization	$	—	$	31	$	78
Capital expenditures	$	—	$	15	$	24

PARENT COMPANY FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

PARENT COMPANY FINANCIAL STATEMENTS

PARENT COMPANY FINANCIAL STATEMENTSThe following BFH financial statements are provided in accordance with the rules of the SEC, which require such disclosure when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets. Certain

of the Company’s subsidiaries may be restricted in distributing cash or other assets to BFH, which could be utilized to service its indebtedness. The stand-alone parent-only financial statements are presented below.

Parent Company – Condensed Balance Sheets


	December 31,
	2022		2021
(Millions)
Assets
Cash and cash equivalents	$	5	$	—
Investment in subsidiaries	4,159		4,446
Investment in LVI	6		50
Other assets	119		123
Total assets	$	4,289	$	4,619
Liabilities
Long-term and other debt	$	1,892	$	1,985
Intercompany liabilities, net	86		482
Other liabilities	46		66
Total liabilities	2,024		2,533
Stockholders’ equity	2,265		2,086
Total liabilities and stockholders’ equity	$	4,289	$	4,619

Parent Company – Condensed Statements of Income


	Years Ended December 31,
	2022		2021		2020
(Millions)
Total interest income	$	11	$	12	$	13
Total interest expense	107		103		110
Net interest expense	(96)		(91)		(97)
Dividends from subsidiaries	382		535		256
Loss from equity method investment	(44)		—		—
Total net interest and non-interest income	242		444		159
Total non-interest expenses	1		1		1
Income before income taxes and equity in undistributed net income of subsidiaries	241		443		158
Benefit for income taxes	22		36		21
Income before equity in undistributed net income of subsidiaries	263		479		179
Equity in undistributed net (loss) income of subsidiaries	(40)		322		35
Net income	$	223	$	801	$	214

Parent Company – Condensed Statements of Comprehensive Income


	Years Ended December 31,
	2022		2021		2020
(Millions)
Net income	$	223	$	801	$	214
Other comprehensive (loss) income, net of tax	(3)		7		—
Total comprehensive income, net of tax	$	220	$	808	$	214

Parent Company – Condensed Statements of Cash Flows


	Years Ended December 31,
	2022		2021		2020
(Millions)
Net cash used in operating activities	$	(219)	$	(398)	$	(138)
Investing activities:
Investment in subsidiaries	—		—		(3)
Dividends received	383		533		256
Purchases of available-for-sale securities	—		(10)		—
Net cash provided by investing activities	383		523		253
Financing activities:
Debt proceeds from spinoff of LVI	—		750		—
Borrowings under debt agreements	218		38		1,276
Repayments of borrowings	(319)		(864)		(1,320)
Payment of deferred financing costs	—		(4)		(9)
Dividends paid	(43)		(42)		(61)
Other	(15)		(3)		(1)
Net cash used in financing activities	(159)		(125)		(115)
Change in cash, cash equivalents and restricted cash	5		—		—
Cash, cash equivalents and restricted cash at beginning of year	—		—		—
Cash, cash equivalents and restricted cash at end of year	$	5	$	—	$	—

Non-cash investing and financing activities related to the Parent Company – Condensed Statements of Cash Flows for the year ended December 31, 2022 included the dissolution of a subsidiary, ADS Foreign Holdings, Inc.

Non-cash investing and financing activities for the year ended December 31, 2021 included the Company’s equity method investment in LVI upon spinoff, on November 5, 2021, which totaled $48 million.

Non-cash investing and financing activities related to the Parent Company – Condensed Statements of Cash Flows for the year ended December 31, 2020, included the issuance of approximately 1.9 million shares of the Company’s common stock as non-cash consideration in the acquisition of Lon Inc. on December 3, 2020.

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation, in particular, as a result of the spinoff of its LoyaltyOne segment and its classification as discontinued operations, the Company has adjusted the presentation of its Consolidated Financial Statements from its historical approach under Securities and Exchange Commission (SEC) Regulation S-X Article 5, which is broadly applicable to all “commercial and industrial companies”, to Article 9, which is applicable to “bank holding companies” (BHCs). While neither the Company nor any of its subsidiaries are considered a “bank” within the meaning of the Bank Holding Company Act, the changes from the historical presentation, to the BHC presentation, the most significant of which reflect a reclassification of Interest expense within Net interest income, are intended to reflect the Company’s operations going forward and better align the Company with its peers for comparability purposes. For a discussion of the prior period reclassifications, please refer to Note 22, “Discontinued Operations and Bank Holding Company Presentation” in our Annual Report on Form 10-K for the year ended December 31, 2021. As noted above, the Company’s Consolidated Financial Statements have been presented with its LoyaltyOne segment as discontinued operations, see Note 22, “Discontinued Operations”, for more information.
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of BFH and all subsidiaries in which the Company has a controlling financial interest. For voting interest entities, a controlling financial interest is determined when the Company is able to exercise control over the operating and financial decisions of the investee. For variable interest entities (VIEs), which are themselves determined based on the amount and characteristics of the equity in the entity, the Company has a controlling financial interest when it is determined to be the primary beneficiary. The primary beneficiary is the party having both the power to exercise control over the activities that most significantly impact the VIE’s financial performance, as well as the obligation to absorb the losses of, or the right to receive the benefits from, the VIE that could potentially be significant to that VIE. The Company is the primary beneficiary of its securitization trusts (the Trusts) and therefore consolidates these Trusts within its Consolidated Financial Statements. In cases where the Company does not have a controlling financial interest, but is able to exert significant influence over the operating and financial decisions of the entity, the Company accounts for such investments under the equity method. All intercompany transactions have been eliminated.
Currency Translation	Currency Translation The Company’s monetary assets and liabilities denominated in foreign currencies, for example those of subsidiaries outside of the United States of America (U.S.), are translated into U.S. dollars based on the rates of exchange in effect at the end of the reporting period, while non-monetary assets and liabilities are translated based on the rates of exchange in effect as of the date of the transaction giving rise to the asset or liability. Income and expense items are translated at the average exchange rates prevailing during the period. The resulting effects, along with any related hedge or tax impacts, are recorded in Accumulated other comprehensive loss, a component of stockholders’ equity. Translation adjustments, along with the related hedge and tax impacts, are recognized in the Consolidated Statements of Income upon the sale or substantial liquidation of an investment in a foreign subsidiary. Gains and losses resulting from transactions in currencies other than the entity’s functional currency are recognized in Other non-interest expenses in the Consolidated Statements of Income, and were insignificant for each of the periods presented. Historically, the Company’s impacts from foreign currency exchange rate fluctuations were most prevalent within businesses that have been spun off, such as LoyaltyOne.
Amounts Based on Estimates and Judgments	Amounts Based on Estimates and Judgments The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments about future events that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, as well as the reported amounts of income and expenses during the reporting periods. The most significant of those estimates and judgments relate to the Company’s Allowance for credit losses and Provision for income taxes; actual results could differ.
Revenue Recognition	Revenue Recognition The Company’s primary source of revenue is from Interest and fees on loans from its various credit card and other loan products, and to a lesser extent from contractual relationships with its brand partners. The following describes the Company’s recognition policies across its various sources of revenue. Interest and fees on loans: Represent revenue earned on customer accounts owned by the Company, and is recognized in the period earned in accordance with the contractual provisions of the credit agreements. Interest and fees continue to accrue on all accounts, except in limited circumstances, until the account balance and all related interest and fees are paid or charged-off, in the month during which an account becomes 180 days past due for credit card loans or 120 days past due for other loans, which are buy now, pay later products such as installment loans and the Company’s “split-pay” offerings (BNPL) loans. Charge-offs for unpaid interest and fees, as well as any adjustments to the allowance associated with unpaid interest and fees, are recorded as a reduction of Interest and fees on loans. Direct loan origination costs on Credit card and other loans are deferred and amortized on a straight-line basis over a one-year period for credit card loans, or for BNPL loans over the life of the loan, and are recorded as a reduction to Interest and fees on loans. As of December 31, 2022 and 2021, the remaining unamortized deferred direct loan origination costs were $46 million and $48 million, respectively, and included in Total credit card and other loans. Interest on cash and investment securities: Represents revenue earned on cash and cash equivalents as well as investments in debt and equity securities, and is recognized in the period earned. Interchange revenue, net of retailer share arrangements: Represents revenue earned from merchants, including our brand partners, and cardholders from processing and servicing accounts, and is recognized as such services are performed. Revenue earned from merchants, including our brand partners, primarily consists of merchant and interchange fees, which are transaction fees charged to the merchant for the processing of credit card transactions and are recognized at the time the cardholder transaction occurs. Our credit card program agreements may also provide for royalty payments to our brand partners based on purchased volume or if certain contractual incentives are met, such as if the economic performance of the program exceeds a contractually defined threshold, or for payments for new accounts. These amounts are recorded as a reduction of revenue in the period incurred. Other non-interest income: Represents ancillary revenues earned from cardholders, consisting primarily of monthly fees from the purchase of certain payment protection products which are recognized based on the average cardholder account balance over time and can be cancelled at any point by the cardholder, as well as gains or losses on the sales of loan portfolios, and income or losses from equity method investments. Contract Costs: The Company recognizes as an asset contract costs, such as up-front payments pursuant to contractual agreements with brand partners. Such costs are deferred and recognized on a straight-line basis over the term of the related agreement. Depending on the nature of the contract costs, the amortization is recorded as a reduction to Non-interest income, or as a charge to Non-interest expenses, in the Company’s Consolidated Statements of Income. Amortization of contract costs recorded as a reduction of Interchange revenue, net of retailer share arrangements was $72 million, $64 million and $65 million for the years ended December 31, 2022, 2021 and 2020, respectively; amortization of contract costs recorded in Non-interest expenses totaled $12 million, $11 million and $12 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022 and 2021, the remaining unamortized contract costs were $344 million and $364 million, respectively, and are included in Other assets on the Consolidated Balance Sheets. The Company performs an impairment assessment when events or changes in circumstances indicate that the carrying amount of contract costs may not be recoverable. For the year ended December 31, 2020, due to the COVID-19 pandemic and resulting retail store closures and significant declines in credit sales, the Company recognized an impairment charge of $38 million in Non-interest expenses in its Consolidated Statement of Income. No impairment charges were recognized in either of the years ended December 31, 2022 or 2021.
Cash and Cash Equivalents, Restricted Cash	Cash and Cash EquivalentsCash and cash equivalents include cash and due from banks, interest-bearing cash balances such as those invested in money market funds, as well as other highly liquid short-term investments with an original maturity of three months or less, and restricted cash.Restricted cash primarily represents cash restricted for principal and interest repayments of debt issued by consolidated VIEs, and is recorded in Other assets on the Consolidated Balance Sheets.
Derivative Financial Instruments	Derivative Financial Instruments From time to time, the Company uses derivative financial instruments to manage its exposure to various financial risks; the Company does not trade or speculate in derivative financial instruments. Subject to the criteria set forth in GAAP, the Company will either designate its derivative financial instruments in hedging relationships, or as economic hedges should the criteria in GAAP not be met. The Company’s derivative financial instruments were insignificant to the Consolidated Financial Statements for the periods presented.
Concentrations	CONCENTRATIONSThe Company depends on a limited number of large partner relationships for a significant portion of its revenue.
Recently Issued and Adopted Accounting Standards	RECENTLY ISSUED ACCOUNTING STANDARDS In March 2022, the Financial Accounting Standards Board issued new accounting and disclosure guidance for troubled debt restructurings effective January 1, 2023, with early adoption permitted. Specifically, the new guidance eliminates the previous recognition and measurement guidance for troubled debt restructurings while enhancing the disclosure requirements for certain loan modifications, including requiring disclosure of gross principal losses by year of loan origination. Effective January 1, 2023, the Company adopted the guidance, with no significant impact on its financial position, results of operations and regulatory risk-based capital, or anticipated impacts on its operational processes, controls and governance in support of the new guidance.
Financing Receivable	Primarily, the Company classifies its Credit card and other loans as held for investment. The Company sells a majority of its credit card loans originated by Comenity Bank (CB) and by Comenity Capital Bank (CCB), which together are referred to herein as the “Banks”, to the Trusts, which are themselves consolidated VIEs, and therefore these loans are restricted for securitization investors. All new originations of Credit card and other loans are determined to be held for investment at origination because the Company has the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, the Company considers the average life and homogenous nature of its Credit card and other loans. In assessing whether its Credit card and other loans continue to be held for investment, the Company also considers capital levels and scheduled maturities of funding instruments used. The assertion regarding the intent and ability to hold Credit card and other loans for the foreseeable future can be made with a high degree of certainty given the maturity distribution of the Company’s direct-to-consumer deposits and other funding instruments; the demonstrated ability to replace maturing time-based deposits and other borrowings with new deposits or borrowings; and historic payment activity on its Credit card and other loans. Due to the homogenous nature of the Company’s credit card loans, amounts are classified as held for investment on a brand partner portfolio basis. From time to time certain Credit card loans are classified as held for sale, as determined on a brand partner basis. The Company carries these assets at the lower of aggregate cost or fair value, and continues to recognize finance charges on an accrual basis. Cash flows associated with Credit card and other loans originated or purchased for investment are classified as Cash flows from investing activities, regardless of any subsequent change in intent and ability. Credit Card Loans The Company uses a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. The Company has evaluated multiple risk characteristics across its credit card loans portfolio, and determined delinquency status and credit quality to be the most significant characteristics for estimating expected credit losses. To estimate its Allowance for credit losses, the Company segments its credit card loans on the basis of delinquency status, credit quality risk score and product. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. In determining the estimated life of the Company’s credit card loans, payments were applied to the measurement date balance with no payments allocated to future purchase activity. The Company uses a combination of First In First Out and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) methodologies to model balance paydown.
Transfers of Financial Assets	SECURITIZATIONS The Company accounts for transfers of financial assets as either sales or financings. Transfers of financial assets that are accounted for as sales are removed from the Consolidated Balance Sheets with any realized gain or loss reflected in the Consolidated Statements of Income during the period in which the sale occurs. Transfers of financial assets that are not accounted for as a sale are treated as a financing. The Company regularly securitizes the majority of its credit card loans through the transfer of those loans to one of its Trusts. The Company performs the decision making for the Trusts, as well as servicing the cardholder accounts that generate the credit card loans held by the Trusts. In its capacity as a servicer, the Company administers the loans, collects payments and charges-off uncollectible balances. Servicing fees are earned by a subsidiary of the Company, which are eliminated in consolidation. The Trusts are consolidated VIEs because they have insufficient equity at risk to finance their activities – being the issuance of debt securities and notes, collateralized by the underlying credit card loans. Because the Company performs the decision making and servicing for the Trusts, it has the power to direct the activities that most significantly impact the Trusts’ economic performance (the collection of the underlying credit card loans). In addition, the Company holds all of the variable interests in the Trusts, with the exception of the liabilities held by third-parties. These variable interests provide the Company with the right to receive benefits and the obligation to absorb losses, which could be significant to the Trusts. As a result of these considerations, the Company is deemed to be the primary beneficiary of the Trusts and therefore consolidates the Trusts. The Trusts issue debt securities and notes, which are non-recourse to the Company. The collections on the securitized credit card loans held by the Trusts are available only for payment of those debt securities and notes, or other obligations arising in the securitization transactions. For its securitized credit card loans, during the initial phase of a securitization reinvestment period, the Company generally retains principal collections in exchange for the transfer of additional credit card loans into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.
Property and Equipment	Furniture, equipment, buildings and leasehold improvements are carried at cost less accumulated depreciation, and depreciation is measured on a straight-line basis. Costs incurred during construction are capitalized; depreciation begins once the asset is placed in service. As of December 31, 2022, the Company’s furniture and equipment has remaining estimated useful lives ranging from less than one year to 10 years. Leasehold improvements are depreciated over the lesser of the remaining terms of the respective leases, or the economic lives of the improvements, and range from less than one year to 16 years, as of December 31, 2022. Costs associated with the acquisition or development of internal-use software are also capitalized and recorded in Property and equipment, net. Once the internal-use software is ready for its intended use, the cost is amortized on a straight-line basis over the software’s estimated useful life. As of December 31, 2022, the Company’s internal-use software has remaining estimated useful lives ranging from less than one year to 10 years. The Company reviews long-lived assets and asset groups for impairment whenever events or circumstances indicate their carrying amounts may not be recoverable. An impairment is recognized if the carrying amount is not recoverable and exceeds the asset or asset group’s fair value.
Goodwill	Goodwill is reviewed at least annually for impairment, or more frequently if circumstances indicate that an impairment is probable, using qualitative or quantitative analysis. No goodwill impairment has been recognized during any of the years ended December 31, 2022, 2021, or 2020.
Intangible Assets, Net	The Company’s identifiable intangible assets consist of both amortizable and non-amortizable intangible assets. Definite-lived intangible assets are subject to amortization and are amortized on a straight-line basis over their estimated useful lives; indefinite-lived intangible assets are not amortized. The Company reviews long-lived assets and asset groups, including intangible assets, for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable; recognizing an impairment if the carrying amount is not recoverable and exceeds the fair value of the asset or asset group. No impairment of intangible assets has been recognized during any of the years ended December 31, 2022, 2021, or 2020.
Leases	The Company has various operating leases for facilities and equipment which are recorded as lease-related assets (right-of-use assets) and liabilities for those leases with terms greater than 12 months. The Company does not have any finance leases. The Company determines if an arrangement is a lease or contains a lease at inception, and does not separate lease and non-lease components. Right-of-use assets are recognized as of the lease commencement date at amounts equal to the respective lease liabilities, adjusted for any prepaid lease payments, initial direct costs and lease incentives. The Company’s lease liabilities are recognized as of the lease commencement date, or upon modification of the lease, at the present value of the contractual fixed lease payments, discounted using the Company’s incremental borrowing rate as the rate implicit in the lease is typically not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred. As of both December 31, 2022 and 2021, the weighted average discount rate applied by the Company was 5.8%. As of December 31, 2022, the Company’s leases have remaining lease terms ranging from less than one year, up to 16 years, some of which may include renewal options, while the weighted average remaining lease term was 8.8 years and 9.8 years as of December 31, 2022 and 2021, respectively. Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets; lease expense for these leases is recognized on a straight-line basis over the lease term.As with other long-lived assets, right-of-use assets are reviewed for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable.
Stock Compensation Expense	Stock-based compensation expense is measured at the grant date of the award, based on the fair value of the award, and is recognized ratably over the requisite service period. Stock-based compensation expense recognized in Employee compensation and benefits expense in the Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020 was $32 million, $25 million and $15 million, respectively, with corresponding income tax benefits of $5 million, $4 million and $3 million, respectively. As the amount of stock-based compensation expense recognized is based on awards ultimately expected to vest, the amount recognized in the Company’s Consolidated Statements of Income has been reduced for estimated forfeitures. The Company estimates forfeitures at each grant date based on historical experience, with forfeiture estimates to be revised, if necessary, in subsequent periods should actual forfeitures differ from those estimates; forfeitures were estimated at 5% for each of the years ended December 31, 2022, 2021 and 2020.
Income Taxes	The Company files income tax returns in federal, state, local and foreign jurisdictions, as applicable. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions.
Earnings Per Share	Basic earnings (losses) per share (EPS) is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of stock options, unvested restricted stock awards, or other dilutive securities. Diluted EPS is based on the weighted average number of common and potentially dilutive common shares (dilutive stock options, unvested restricted stock awards and other dilutive securities outstanding during the year) pursuant to the Treasury Stock method

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Schedule of other significant accounting policies

Significant Accounting Policy

Note Number

Note Title

Credit Card and Other Loans

Note 2

Credit Card and Other Loans

Allowance for Credit Losses

Note 3

Allowance for Credit Losses

Transfers of Financial Assets

Note 4

Securitizations

Investment Securities

Note 5

Investment Securities

Property and Equipment

Note 6

Property and Equipment, Net

Goodwill

Note 7

Goodwill and Intangible Assets, Net

Intangible Assets, Net

Note 7

Goodwill and Intangible Assets, Net

Leases

Note 9

Leases

Stock Compensation Expense

Note 18

Stockholders' Equity

Income Taxes

Note 19

Income Taxes

Earnings Per Share

Note 20

Earnings Per Share

CREDIT CARD AND OTHER LOANS (Tables)

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

Schedule of components of credit card and other loans

The Company’s Credit card and other loans were as follows, as of December 31:


	2022		2021
(Millions)
Credit card loans	$	21,065	$	17,217
Installment or other loans	300		182
Total credit card and other loans (1)(2)	21,365		17,399
Less: Allowance for credit losses	(2,464)		(1,832)
Credit card and other loans, net	$	18,901	$	15,567

______________________________


(1)			Includes $15.4 billion and $11.2 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of December 31, 2022 and 2021, respectively.


(2)			Includes $307 million and $224 million, of accrued interest and fees that have not yet been billed to cardholders as of December 31, 2022 and 2021, respectively.

Schedule of aging analysis of total credit card and other loans portfolio at amortized cost

The following table presents the delinquency trends on the Company’s Credit card and other loans portfolio based on the amortized cost:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 days delinquent		61 to 90 days delinquent		91 or more days delinquent		Total delinquent		Current		Total
(Millions)
As of December 31, 2022	$	444	$	296	$	732	$	1,472	$	19,559	$	21,031

As of December 31, 2021	$	262	$	186	$	401	$	849	$	16,284	$	17,133

______________________________

Schedule of information on credit card loans that are considered troubled debt restructurings

The following table provides additional information regarding credit card loans modified as TDRs for the years ended December 31:


	2022					2021
	Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance		Number of Restructurings	Pre- modification Outstanding Balance		Post- modification Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings	149,815	$	227	$	227	171,993	$	254	$	254


	2022			2021
	Number of Restructurings	Outstanding Balance		Number of Restructurings	Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings that subsequently defaulted	63,726	$	88	114,531	$	154

Schedule of composition of obligor credit quality


	Vantage
	2022						2021
	661 or Higher		601 to 660		600 or Less		661 or Higher		601 to 660		600 or Less
Credit card loans	62	%	26	%	12	%	62	%	26	%	12	%

ALLOWANCE FOR CREDIT LOSSES (Tables)

12 Months Ended

Dec. 31, 2022

Credit Loss [Abstract]

Schedule of Company's allowance for loan loss


	2022		2021		2020
(Millions)
Beginning balance(1)	$	1,832	$	2,008	$	1,815

Provision for credit losses(2)	1,594		544		1,266
Change in estimate for uncollectible unpaid interest and fees	10		—		10
Net principal losses(3)	(972)		(720)		(1,083)
Ending balance	$	2,464	$	1,832	$	2,008

______________________________

(1)The 2020 Beginning balance includes an increase of $644 million as of January 1, 2020, related to the adoption of the CECL methodology.

(2)Provision for credit losses includes a build/release for the Allowance, as well as replenishment of Net principal losses.

SECURITIZATIONS (Tables)

12 Months Ended

Dec. 31, 2022

Offsetting [Abstract]

Schedule of securitized credit card receivables, delinquencies and net charge-offs


	2022		2021
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	15,383	$	11,215
Of which: principal amount of credit card loans 91 days or more past due	$	307	$	159


	2022		2021		2020
(Millions)
Net principal losses of securitized credit card loans	$	554	$	453	$	756

AVAILABLE-FOR-SALE SECURITIES (Tables)

12 Months Ended

Dec. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of gain (loss) on investments

The table below reflects unrealized gains and losses as of December 31, 2022 and December 31, 2021, respectively:


	2022								2021
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale securities	$	175	$	—	$	(23)	$	152	$	173	$	4	$	(2)	$	175
Equity securities	$	69	$	—	$	—	$	69	$	64	$	—	$	—	$	64
Total	$	244	$	—	$	(23)	$	221	$	237	$	4	$	(2)	$	239

Schedule of unrealized losses and fair value for investments that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position


	December 31, 2022
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)
Total	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)


	December 31, 2021
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale securities	$	57	$	(1)	$	15	$	(1)	$	72	$	(2)
Total	$	57	$	(1)	$	15	$	(1)	$	72	$	(2)

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of property and equipment, net

Property and equipment consists of the following as of December 31:


	2022		2021
(Millions)
Internal-use computer software and development	$	305	$	263
Furniture and equipment	96		107
Land and leasehold improvements	72		76
Construction in progress	9		25
Total	482		471
Accumulated depreciation and amortization	(287)		(256)
Property and equipment	$	195	$	215

GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of changes in carrying amount of goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2022 and 2021, respectively, were as follows:


(Millions)
Balance as of December 31, 2020	$	634
Goodwill acquired during the period	—
Balance as of December 31, 2021	$	634
Goodwill acquired during the period	—
Balance as of December 31, 2022	$	634

______________________________

Schedule of finite-lived intangible assets

Intangible assets consist of the following as of December 31:


	2022
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(6)	$	3	3 years
Premium on purchased credit card loan portfolios	$	230	$	(73)	$	157	4-13 years
Non-compete agreements	$	2	$	(1)	$	1	5 years
	$	241	$	(80)	$	161
Indefinite-Lived Assets
Tradename	$	4	$	—	$	4	Indefinite life
Total intangible assets	$	245	$	(80)	$	165


	2021
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(3)	$	6	3 years
Premium on purchased credit card loan portfolios	133		(89)		44		1-13 years
Non-compete agreements	2		—		2		5 years
	$	144	$	(92)	$	52
Indefinite-Lived Assets
Tradename	1		—		1		Indefinite life
Total intangible assets	$	145	$	(92)	$	53

Schedule of indefinite-lived intangible assets

Intangible assets consist of the following as of December 31:


	2022
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(6)	$	3	3 years
Premium on purchased credit card loan portfolios	$	230	$	(73)	$	157	4-13 years
Non-compete agreements	$	2	$	(1)	$	1	5 years
	$	241	$	(80)	$	161
Indefinite-Lived Assets
Tradename	$	4	$	—	$	4	Indefinite life
Total intangible assets	$	245	$	(80)	$	165


	2021
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(3)	$	6	3 years
Premium on purchased credit card loan portfolios	133		(89)		44		1-13 years
Non-compete agreements	2		—		2		5 years
	$	144	$	(92)	$	52
Indefinite-Lived Assets
Tradename	1		—		1		Indefinite life
Total intangible assets	$	145	$	(92)	$	53

Schedule of estimated amortization expense related to intangible assets

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows for the years ending December 31:


(Millions)
2023			41
2024			37
2025			29
2026			24
2027			8
Thereafter			22
			161

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
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-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=121556970&loc=SL108378252-109267

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
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-Paragraph 1
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-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 2
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13854-109267

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 55
-Paragraph 24
-URI https://asc.fasb.org/extlink&oid=122137925&loc=d3e14258-109268

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

+ Details

OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2022

Other Assets [Abstract]

Schedule of other assets

The following is a summary of Other assets as of December 31:


	2022		2021
(Millions)
Deferred tax asset, net	$	552	$	302
Deferred contract costs	344		364
Accounts receivable, net (1)	164		151
Right-of-use assets - operating	88		97
Restricted cash (2)	36		877
Investment in Loyalty Ventures Inc. (LVI)	6		50
Other (3)	210		151
Total other assets	$	1,400	$	1,992

______________________________

(2)The balance as of December 31, 2021 represents principal accumulation for the repayment of debt issued by consolidated VIEs that matured in 2022.

(3)Primarily comprised of prepaid expenses and non-income-based tax receivables.

LEASES (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Schedule of lease cost

The components of lease expense were as follows for the years ended December 31:


	2022		2021		2020
(Millions)
Operating lease cost	$	17	$	23	$	25
Short-term lease cost	—		—		1
Variable lease cost	3		2		2
Sublease income	(7)		(5)		(1)
Total	$	13	$	20	$	27

Supplemental lease-related cash flow information was as follows for the years ended December 31:


	2022		2021		2020
(Millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	23	$	25	$	28
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—	$	5	$	1

Schedule of maturities of lease liabilities

Future, maturities of the Company’s lease liabilities, by year, were as follows as of December 31, 2022:


(Millions)
2023	$	19
2024	20
2025	19
2026	18
2027	16
Thereafter	70
Total undiscounted lease liabilities	162
Less: Amount representing interest	(36)
Total present value of minimum lease payments	$	126

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2022

Other Liabilities Disclosure [Abstract]

Deposit by type

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of December 31:


	2022		2021
(Millions)
Interest-bearing	$	13,787	$	11,027
Non-interest-bearing (including cardholder credit balances)	39		—
Total deposits	$	13,826	$	11,027

Deposits by deposit type were as follows as of December 31:


	2022		2021
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	2,782	$	1,713
Wholesale	3,954		3,873
Certificates of deposit
Direct-to-consumer (retail)	2,684		1,467
Wholesale	4,367		3,974
Cardholder credit balances	39		—
Total deposits	$	13,826	$	11,027

Time deposit maturities

The scheduled maturities of certificates of deposit were as follows as of December 31, 2022:


(Millions)
2023(1)	$	4,437
2024	1,333
2025	482
2026	234
2027	565
Thereafter	—
Total certificates of deposit	$	7,051

__________________________________


(1)			The 2023 balance includes $9 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (e)

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
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-Name Regulation S-K (SK)
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-Section 1406
-Paragraph (a)
-Subparagraph (1)

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
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-Section 1406
-Paragraph (f)
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Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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-Section 1406
-Paragraph (d)

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (4)

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (c)

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (2)

Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (3)

Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)

+ Details

BORROWINGS OF LONG-TERM AND OTHER DEBT (Tables)

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Schedule of debt

Long-term and other debt consisted of the following as of December 31:


Description	2022		2021		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	July 2024	(1)
Term loans	556		658		July 2024	(2)
Senior notes due 2024	850		850		December 2024	4.750%
Senior notes due 2026	500		500		January 2026	7.000%
Subtotal	1,906		2,008
Less: Unamortized debt issuance costs	14		22
Total long-term and other debt	$	1,892	$	1,986

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	—	$	1,572
Conduit asset-backed securities	6,115		3,883		Various – Jun 2023 to Oct 2023	(3)
Subtotal	6,115		5,455
Less: Unamortized debt issuance costs	—		2
Total debt issued by consolidated VIEs	$	6,115	$	5,453

Total borrowings of long-term and other debt	$	8,007	$	7,439

______________________________


(1)			The interest rate in 2022 is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin. The interest rate in 2021 is based upon the London Interbank Offered Rate (LIBOR) plus an applicable margin.


(2)			The interest rate in 2022 is based upon SOFR plus an applicable margin. The interest rate in 2021 is based upon LIBOR plus an applicable margin. The weighted average interest rate for the term loans was 3.24% and 1.85% as of December 31, 2022 and 2021, respectively.


(3)			The interest rate in 2022 is based upon SOFR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. The interest rate in 2021 is based upon LIBOR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. As of December 31, 2022, the interest rates ranged from 5.08% to 5.93%. As of December 31, 2021, the interest rates ranged from 0.89% to 0.96%.

Schedule of maturity of debt

The future principal payments for the Company’s long-term and other debt are as follows, as of December 31, 2022:


Year	Long-Term and Other Debt		Debt Issued by Consolidated VIEs		Total
(Millions)
2023	$	152	$	6,115	$	6,267
2024	1,254		—		1,254
2025	—		—		—
2026	500		—		500
2027	—		—		—
Thereafter	—		—		—
Total maturities	1,906		6,115		8,021
Unamortized debt issuance costs	(14)		—		(14)
	$	1,892	$	6,115	$	8,007

OTHER LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2022

Other Liabilities [Abstract]

Schedule of other liabilities

The following is a summary of Other liabilities as of December 31:


	2022		2021
(Millions)
Accounts payable and other brand partner liabilities	$	398	$	291
Accrued liabilities (1)	306		314
Long-term tax reserves	306		313
Operating lease liabilities	126		140
Other(2)	173		136
Total other liabilities	$	1,309	$	1,194

______________________________

(1)Primarily related to accrued payroll and benefits, marketing, taxes and professional services expenses.

(2)Primarily comprised of long-term unearned revenue and cardholder liabilities.

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES (Tables)

12 Months Ended

Dec. 31, 2022

Other Non-Interest Income and Other Non-Interest Expenses [Abstract]

Components of other non-interest income

The following table provides the components of Other non-interest income for the years ended December 31:


	2022		2021		2020
(Millions)
Payment protection products	$	154	$	141	$	156
Loss from equity method investment	(44)		2		—
Other	4		13		21
Total other non-interest income	$	114	$	156	$	177

Components of other non-interest expenses

The following table provides the components of Other non-interest expenses for the years ended December 31:


	2022		2021		2020
(Millions)
Professional services and regulatory fees	$	142	$	136	$	114
Asset impairment charges	—		—		64
Other (1)	85		86		108
Total other non-interest expense	$	227	$	222	$	286

______________________________


(1)			Primarily related to occupancy expense and non-income based taxes.

FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of estimated fair value of Company's financial instruments

The following table summarizes the carrying values and fair values of the Company’s financial assets and financial liabilities as of December 31:


	2022				2021
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	18,901	$	21,328	$	15,567	$	17,989
Investment securities	221		221		239		239
Financial liabilities
Deposits	13,826		13,731		11,027		11,135
Debt issued by consolidated VIEs	6,115		6,115		5,453		5,467
Long-term and other debt	1,892		1,759		1,986		2,053

Schedule of assets and liabilities carried at fair value measured on recurring basis


	2022
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	221	$	44	$	177	$	—
Total assets measured at fair value	$	221	$	44	$	177	$	—


	2021
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	239	$	48	$	191	$	—
Total assets measured at fair value	$	239	$	48	$	191	$	—

Schedule of assets and liabilities disclosed but not carried at fair value


	2022
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	21,328	$	—	$	—	$	21,328
Total	$	21,328	$	—	$	—	$	21,328

Financial liabilities:
Deposits	$	13,731	$	—	$	13,731	$	—
Debt issued by consolidated VIEs	6,115		—		6,115		—
Long-term and other debt	1,759		—		1,759		—
Total	$	21,605	$	—	$	21,605	$	—


	2021
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	17,989	$	—	$	—	$	17,989
Total	$	17,989	$	—	$	—	$	17,989

Financial liabilities:
Deposits	$	11,135	$	—	$	11,135	$	—
Debt issued by consolidated VIEs	5,467		—		5,467		—
Long-term and other debt	2,053		—		2,053		—
Total	$	18,655	$	—	$	18,655	$	—

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Schedule of actual capital ratios and minimum ratios


	Actual Ratio		Minimum Ratio for Capital Adequacy Purposes		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
Comenity Bank
Common Equity Tier 1 capital ratio(1)	18.4	%	4.5	%	6.5	%
Tier 1 capital ratio(2)	18.4		6.0		8.0
Total Risk-based capital ratio(3)	19.7		8.0		10.0
Tier 1 Leverage capital ratio(4)	16.7		4.0		5.0

Comenity Capital Bank
Common Equity Tier 1 capital ratio(1)	16.1	%	4.5	%	6.5	%
Tier 1 capital ratio(2)	16.1		6.0		8.0
Total Risk-based capital ratio(3)	17.4		8.0		10.0
Tier 1 Leverage capital ratio(4)	14.9		4.0		8.0

Combined Banks
Common Equity Tier 1 capital ratio(1)	17.0	%	4.5	%	6.5	%
Tier 1 capital ratio(2)	17.0		6.0		8.0
Total Risk-based capital ratio(3)	18.3		8.0		10.0
Tier 1 Leverage capital ratio(4)	15.6		4.0		5.0

(1)The Common Equity Tier 1 capital ratio represents common equity tier 1 capital divided by total risk-weighted assets.

(2)The Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets.

(3)The Total Risk-based capital ratio represents total capital divided by total risk-weighted assets.

(4)The Tier 1 Leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2022

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of changes in each component of accumulated comprehensive income (loss), net of tax effects

The changes in each component of accumulated other comprehensive loss, net of tax effects, are as follows:


	Net Unrealized Gains (Losses) on AFS Securities		Net Unrealized Losses on Cash Flow Hedges		Net Unrealized Losses on Net Investment Hedge		Foreign Currency Translation Losses (1)		Accumulated Other Comprehensive Loss
(Millions)
Balance as of January 1, 2020	$	2	$	—	$	(7)	$	(95)	$	(100)
Changes in other comprehensive income (loss)	21		(1)		—		71		91
Recognition resulting from the sale of Precima's foreign subsidiaries	—		—		—		4		4
Balance as of December 31, 2020	$	23	$	(1)	$	(7)	$	(20)	$	(5)
Changes in other comprehensive (loss) income	(21)		2		—		(37)		(56)
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries	(1)		(1)		7		54		59
Balance as of December 31, 2021	$	1	$	—	$	—	$	(3)	$	(2)
Changes in other comprehensive (loss) income	(19)		—		—		—		(19)

Balance as of December 31, 2022	$	(18)	$	—	$	—	$	(3)	$	(21)

______________________________

(1)Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates from the Company’s former LoyaltyOne segment, which was spun off in November 2021.

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Schedule of performance-based and service-based restricted stock unit awards

The following table summarizes RSUs activity under the Company’s equity compensation plans:


	Market- Based (1)	Performance- Based (1)	Service- Based	Total	Weighted Average Fair Value
Balance as of January 1, 2020	24,288	230,272	258,572	513,132	$	172.06
Shares granted	20,770	219,186	241,610	481,566	89.11
Shares vested	—	(42,097)	(127,921)	(170,018)	175.09
Shares forfeited	(22,831)	(186,135)	(38,447)	(247,413)	166.93
Balance as of December 31, 2020	22,227	221,226	333,814	577,267	$	103.89
Shares granted (2)	2,641	111,542	774,062	888,245	88.18
Shares vested	—	(24,677)	(167,723)	(192,400)	118.78
Shares forfeited	(5,801)	(216,675)	(291,201)	(513,677)	93.16
Balance as of December 31, 2021	19,067	91,416	648,952	759,435	$	89.14
Shares granted	—	82,513	766,178	848,691	63.22
Shares vested	—	(8,983)	(218,077)	(227,060)	78.23
Shares forfeited	(19,067)	—	(89,390)	(108,457)	65.83
Balance as of December 31, 2022	—	164,946	1,107,663	1,272,609	$	68.86
Outstanding and Expected to Vest				1,238,212	$	69.17

______________________________


(1)			Shares granted reflect a 100% target attainment of the respective market-based or performance-based metric. Shares forfeited include those restricted stock units forfeited as a result of the Company not meeting the respective market-based or performance-based metric conditions.


(2)			Shares granted reflect a November 2021 make-whole equity adjustment to unvested shares due to the reduction in the Company’s share value resulting from the spinoff of LVI. This adjustment increased shares granted by 2,641 shares, 12,659 shares and 96,556 shares for market-based, performance-based and service-based awards, respectively. These shares were excluded from the weighted average fair value calculation.

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of components of income before income taxes and components of income tax expense

The components of the Company’s Provision for income taxes included in the Consolidated Statements of Income were as follows for the years ended December 31:


	2022		2021		2020
(Millions)
Current
Federal	$	280	$	218	$	228
State	41		49		36
Total current income tax expense	321		267		264
Deferred
Federal	(201)		(13)		(143)
State	(44)		(7)		(28)
Total deferred income tax benefit	(245)		(20)		(171)
Total Provision for income taxes	$	76	$	247	$	93

Summary of reconciliation of recorded federal provision for income taxes to the expected amount computed by applying the federal statutory rate


	2022		2021		2020
(Millions)
Expected expense at statutory rate	$	63	$	219	$	63
(Decrease) increase in income taxes resulting from:
State and local income taxes, net of federal benefit	(2)		33		6
Impact of 2017 Tax Reform	—		(8)		(2)
Non-deductible expenses	6		4		6
IRC Section 199, net of tax reserves	4		—		12
Basis difference in unconsolidated subsidiaries	(8)		—		—
Valuation allowance	16		—		—
Other	(3)		(1)		8
Total	$	76	$	247	$	93

Summary of deferred tax assets and liabilities

The following table reflects the significant components of Deferred tax assets and liabilities as of December 31:


	2022		2021
(Millions)
Deferred tax assets
Deferred revenue	$	14	$	17
Allowance for credit losses	598		447
Net operating loss carryforwards and other carryforwards	39		42
Operating lease liabilities	30		33
Accrued expenses and other	88		65
Total deferred tax assets	769		604
Valuation allowance	(26)		(8)
Deferred tax assets, net of valuation allowance	743		596
Deferred tax liabilities
Deferred income	$	148	$	221
Depreciation	7		28
Right of use assets	20		22
Intangible assets	16		23
Total deferred tax liabilities	191		294

Net deferred tax assets	$	552	$	302

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	552	$	302

Summary of reconciliation of unrecognized tax benefits

The following table presents changes in unrecognized tax benefits:


(Millions)
Balance as of January 1, 2020	$	215
Increases related to prior years’ tax positions	59
Decreases related to prior years’ tax positions	(23)
Increases related to current year tax positions	11
Settlements during the period	(5)
Lapses of applicable statutes of limitation	(2)
Balance as of December 31, 2020	$	255
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(13)
Increases related to current year tax positions	12
Settlements during the period	(8)
Balance as of December 31, 2021	$	247
Increases related to prior years’ tax positions	8
Decreases related to prior years’ tax positions	(25)
Increases related to current year tax positions	14
Settlements during the period	(2)
Balance as of December 31, 2022	$	242

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted net income per share

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the years ended December 31:


	2022		2021		2020
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	224	$	797	$	208
(Loss) income from discontinued operations, net of income taxes	(1)		4		6
Net income	$	223	$	801	$	214

Denominator
Basic: Weighted average common stock	49.9		49.7		47.8
Weighted average effect of dilutive securities
Net effect of dilutive unvested restricted stock awards (1)	0.1		0.3		0.1
Denominator for diluted calculation	50.0		50.0		47.9

Basic EPS
Income from continuing operations	$	4.48	$	16.02	$	4.36
(Loss) income from discontinued operations, net of income taxes	$	(0.01)	$	0.07	$	0.11
Net income	$	4.47	$	16.09	$	4.47

Diluted EPS
Income from continuing operations	$	4.47	$	15.95	$	4.35
(Loss) income from discontinued operations, net of income taxes	$	(0.01)	$	0.07	$	0.11
Net income	$	4.46	$	16.02	$	4.46

______________________________

SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

12 Months Ended

Dec. 31, 2022

Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract]

Schedule of reconciliation of cash and cash equivalents


	2022		2021
(Millions)
Cash and Cash Equivalents	$	3,891	$	3,046
Restricted Cash included within Other Assets	36		877
Total cash, cash equivalents and restricted cash	$	3,927	$	3,923

DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

Schedule of financial statement information for discontinued operations


	2022		2021		2020
(Millions)
Total interest income	$	—	$	1	$	1
Total interest expense (1)	—		11		17
Net interest income	—		(10)		(16)
Total non-interest income	—		574		765
Total non-interest expenses	1		519		656
Income before provision from income taxes	(1)		45		93
Provision for income taxes	—		36		6
Income from discontinued operations, net of income taxes	$	(1)	$	9	$	87

______________________________


(1)			The Company’s Credit Agreement, as amended, required a $725 million prepayment of term loans in conjunction with the LoyaltyOne spinoff. As a result, the interest expense reflected above is the allocation to discontinued operations of interest on the basis of this $725 million mandatory prepayment.

The following table summarizes the depreciation and amortization, and capital expenditures of the Company’s former LoyaltyOne segment for the years ended December 31:


	2022		2021		2020
(Millions)
Depreciation and amortization	$	—	$	31	$	78
Capital expenditures	$	—	$	15	$	24

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

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+ Details

PARENT COMPANY FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of balance sheets

Parent Company – Condensed Balance Sheets


	December 31,
	2022		2021
(Millions)
Assets
Cash and cash equivalents	$	5	$	—
Investment in subsidiaries	4,159		4,446
Investment in LVI	6		50
Other assets	119		123
Total assets	$	4,289	$	4,619
Liabilities
Long-term and other debt	$	1,892	$	1,985
Intercompany liabilities, net	86		482
Other liabilities	46		66
Total liabilities	2,024		2,533
Stockholders’ equity	2,265		2,086
Total liabilities and stockholders’ equity	$	4,289	$	4,619

Schedule of statements of income

Parent Company – Condensed Statements of Income


	Years Ended December 31,
	2022		2021		2020
(Millions)
Total interest income	$	11	$	12	$	13
Total interest expense	107		103		110
Net interest expense	(96)		(91)		(97)
Dividends from subsidiaries	382		535		256
Loss from equity method investment	(44)		—		—
Total net interest and non-interest income	242		444		159
Total non-interest expenses	1		1		1
Income before income taxes and equity in undistributed net income of subsidiaries	241		443		158
Benefit for income taxes	22		36		21
Income before equity in undistributed net income of subsidiaries	263		479		179
Equity in undistributed net (loss) income of subsidiaries	(40)		322		35
Net income	$	223	$	801	$	214

Schedule of statements of comprehensive income

Parent Company – Condensed Statements of Comprehensive Income


	Years Ended December 31,
	2022		2021		2020
(Millions)
Net income	$	223	$	801	$	214
Other comprehensive (loss) income, net of tax	(3)		7		—
Total comprehensive income, net of tax	$	220	$	808	$	214

Schedule of statements of cash flows

Parent Company – Condensed Statements of Cash Flows


	Years Ended December 31,
	2022		2021		2020
(Millions)
Net cash used in operating activities	$	(219)	$	(398)	$	(138)
Investing activities:
Investment in subsidiaries	—		—		(3)
Dividends received	383		533		256
Purchases of available-for-sale securities	—		(10)		—
Net cash provided by investing activities	383		523		253
Financing activities:
Debt proceeds from spinoff of LVI	—		750		—
Borrowings under debt agreements	218		38		1,276
Repayments of borrowings	(319)		(864)		(1,320)
Payment of deferred financing costs	—		(4)		(9)
Dividends paid	(43)		(42)		(61)
Other	(15)		(3)		(1)
Net cash used in financing activities	(159)		(125)		(115)
Change in cash, cash equivalents and restricted cash	5		—		—
Cash, cash equivalents and restricted cash at beginning of year	—		—		—
Cash, cash equivalents and restricted cash at end of year	$	5	$	—	$	—

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Line Items]
Period for which interest and fee income accrue until balance, interest and fees paid or charged off	180 days
Period for which interest and fee income accrue until balance, interest and other fees are paid or charged off on installment loan receivables	120 days
Amortization term of direct loan amortization costs	1 year
Unamortized deferred costs related to loan origination	$ 46	$ 48
Unamortized contract costs	344	364
Cash and due from banks	288	251
Interest-bearing deposits	3,500	2,700
Short-term investments	130	80
Restricted cash	$ 36	877
Customer Concentration Risk \| Revenue Benchmark \| Five Largest Credit Card Programs
Accounting Policies [Line Items]
Concentration risk	47.00%
Customer Concentration Risk \| Revenue Benchmark \| BJs Wholesale Club (BJs)
Accounting Policies [Line Items]
Concentration risk	10.00%
Customer Concentration Risk \| Liabilities, Total \| Five Largest Credit Card Programs
Accounting Policies [Line Items]
Concentration risk	41.00%
Customer Concentration Risk \| Liabilities, Total \| BJs Wholesale Club (BJs)
Accounting Policies [Line Items]
Concentration risk	11.00%
Interchange Revenue, Net of Retailer Share Arrangements
Accounting Policies [Line Items]
Amortization of contract costs	$ 72	64	$ 65
Non-Interest Expenses
Accounting Policies [Line Items]
Amortization of contract costs	12	11	12
Impairment of contract costs	$ 0	$ 0	$ 38

CREDIT CARD AND OTHER LOANS - Financing Receivable (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	$ 21,365	$ 17,399
Less: Allowance for credit losses	(2,464)	(1,832)	$ (2,008)	$ (1,815)
Credit card and other loans, net	18,901	15,567
Credit card and loan receivables restricted for securitization investors	15,383	11,215
Unbilled to cardholders	307	224
Variable Interest Entity, Primary Beneficiay
Financing Receivable, Allowance for Credit Loss [Line Items]
Credit card and loan receivables restricted for securitization investors	15,383	11,215
Credit Card and Loan Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	21,065	17,217
Installment Loan Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	300	182
Less: Allowance for credit losses	$ (21)	$ (14)

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

CREDIT CARD AND OTHER LOANS - Amortized Cost Basis Credit Card and Loan Receivables (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 21,031	$ 17,133
Unbilled to cardholders	307	224
Total delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	1,472	849
31 to 60 days delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	444	262
61 to 90 days delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	296	186
91 or more days delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	732	401
Current
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 19,559	$ 16,284

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 7A
-URI https://asc.fasb.org/extlink&oid=123577603&loc=SL6953401-111524

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 79
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922352-210448

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(b))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919253-210447

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 45
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=124255206&loc=SL82895884-210446

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 5
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919230-210447

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 80
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922355-210448

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (1)

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (2)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1404
-Paragraph (a)

+ Details

CREDIT CARD AND OTHER LOANS - Narrative (Details) $ in Millions	1 Months Ended				12 Months Ended
	Feb. 28, 2023 USD ($)	Oct. 31, 2022 USD ($)	Apr. 30, 2022 USD ($)	Aug. 31, 2021 USD ($)	Dec. 31, 2022 USD ($) loan portfolio_sale	Dec. 31, 2021 USD ($) loan	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Financing Receivable, Allowance for Credit Loss [Line Items]
Re-aged accounts as percentage of total credit card and loan receivables					1.40%	1.70%	2.80%
Number of days a loan is contractually past due before resulting in charge-off					180 days
Period for which interest and fee income accrue until balance, interest and other fees are paid or charged off on installment loan receivables					120 days
Number of days after notification of creditor's bankruptcy or death when an account is charged-off					60 days
Actual charge-offs for unpaid interest and fees					$ 651	$ 456	$ 717
Maximum percentage of credit card receivables to total portfolio					1.00%	2.00%
Impaired credit card and loan receivables					$ 257	$ 281
Allowance for loan loss on impaired credit card receivables					70	81
Average recorded investment in impaired credit card receivables					257	383
Interest income on modified credit card receivables					$ 15	$ 26	30
Percentage of financing receivable outstanding					0.60%	0.10%
Total credit card and other loans					$ 21,031	$ 17,133
Unused credit card lines available to cardholders					128,000	112,000
Proceeds from sale of credit card loan portfolios				$ 512	$ 0	$ 512	289
Gain on sales of credit card portfolio				$ 10
Credit card loans held for sale \| loan					0	0
Number of portfolio sales \| portfolio_sale					0
Allowance for credit loss					$ 2,464	$ 1,832	$ 2,008	$ 1,815
Subsequent Event \| BJs Wholesale Club (BJs)
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	$ 2,300
Proceeds from sale of credit card loan portfolios	$ 2,500
Customer Relationships
Financing Receivable, Allowance for Credit Loss [Line Items]
Acquired intangible assets		$ 118
Maximum
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of days after notification of creditor's bankruptcy or death when an account is charged-off					180 days
Installment Loan Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Period for which interest and fee income accrue until balance, interest and other fees are paid or charged off on installment loan receivables					120 days
Total credit card and other loans					$ 299	182
Allowance for credit loss					$ 21	$ 14
Installment Loan Receivables \| FICO Score, From 660 and Above
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding					86	84
Installment Loan Receivables \| FICO Score Below 660
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding					14
Installment Loan Receivables \| FICO Score, From 660 and Below
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding						16
Credit Card Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Payments to acquire loans receivable		1,600	$ 249
Allowance for credit loss		$ 1,500

CREDIT CARD AND OTHER LOANS - Troubled Debt Restructurings (Details) - Consumer Portfolio Segment $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($) item
Troubled debt restructurings
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Restructurings \| item	149,815	171,993
Pre- modification Outstanding Balance	$ 227	$ 254
Post- modification Outstanding Balance	$ 227	$ 254
Troubled debt restructurings that subsequently defaulted
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Restructurings \| item	63,726	114,531
Outstanding Balance	$ 88	$ 154

CREDIT CARD AND OTHER LOANS - Credit Quality on Amortized Cost Basis (Details) - Credit card loans - No Score	Dec. 31, 2022	Dec. 31, 2021
661 or Higher
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	62.00%	62.00%
601 to 660
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	26.00%	26.00%
600 or Less
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	12.00%	12.00%

ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 2,464	$ 1,832	$ 2,008	$ 1,815
Installment Loan Receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 21	$ 14

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

ALLOWANCE FOR CREDIT LOSSES - Rollforward (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Jan. 01, 2020
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 1,832	$ 2,008	$ 1,815
Provision for credit losses	1,594	544	1,266
Change in estimate for uncollectible unpaid interest and fees	10	0	10
Net principal charge-off	(972)	(720)	(1,083)
Ending balance	2,464	1,832	2,008
Recovery	187	163	205
Recovery adjustment	5
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 2,464	$ 1,832	$ 2,008
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2016-13
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss				$ 644

SECURITIZATIONS (Details) - USD ($) $ in Millions	12 Months Ended
SECURITIZATIONS (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Offsetting Assets [Line Items]
Total credit card loans – available to settle obligations of consolidated VIEs	$ 15,383	$ 11,215
Of which: principal amount of credit card loans 91 days or more past due	307	159
Net principal losses of securitized credit card loans	$ 554	$ 453	$ 756
Minimum
Offsetting Assets [Line Items]
Minimum interests requirement (as a percent)	4.00%
Maximum
Offsetting Assets [Line Items]
Minimum interests requirement (as a percent)	10.00%

INVESTMENT SECURITIES - Amortized Cost (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Amortized Cost	$ 175	$ 173
Unrealized Gains	0	4
Unrealized Losses	(23)	(2)
Fair Value	152	175
Equity Securities, Cost	69	64
Equity Securities, Fair Value	69	64
Available-for-sale and Equity Securities, Amortized Cost	244	237
Available-for-sale and Equity Securities, Fair Value	$ 221	$ 239

INVESTMENT SECURITIES - Continuous Loss Position (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Less than 12 months, Fair Value	$ 95	$ 57
Less than 12 months, Unrealized Losses	(9)	(1)
12 Months or Greater, Fair Value	57	15
12 Months or Greater, Unrealized Losses	(14)	(1)
Fair Value	152	72
Unrealized Losses	$ (23)	$ (2)

INVESTMENT SECURITIES - Narrative (Details) - USD ($)	12 Months Ended
INVESTMENT SECURITIES - Narrative (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-Sale [Line Items]
Gains or losses from the sale of AFS securities	$ 0	$ 0	$ 0
Collateralized Mortgage-Backed Securities
Debt Securities, Available-for-Sale [Line Items]
Available-for-sale, mortgage-backed securities with no stated maturities, amortized cost	175,000,000
Available-for-sale, mortgage-backed securities with no stated maturities, fair value	$ 152,000,000

PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Depreciation
Depreciation	$ 19	$ 26	$ 57
Amortization on capitalized software	68	37	$ 15
Unamortized capitalized software costs	$ 112	$ 113
Furniture and equipment \| Minimum
Property and equipment
Estimated useful life	1 year
Furniture and equipment \| Maximum
Property and equipment
Estimated useful life	10 years
Leasehold Improvements \| Minimum
Property and equipment
Estimated useful life	1 year
Leasehold Improvements \| Maximum
Property and equipment
Estimated useful life	16 years
Internal-use computer software and development \| Minimum
Property and equipment
Estimated useful life	1 year
Internal-use computer software and development \| Maximum
Property and equipment
Estimated useful life	10 years

PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total	$ 482	$ 471
Accumulated depreciation and amortization	(287)	(256)
Property and equipment, net	195	215
Internal-use computer software and development
Property, Plant and Equipment [Line Items]
Total	305	263
Furniture and equipment
Property, Plant and Equipment [Line Items]
Total	96	107
Land and leasehold improvements
Property, Plant and Equipment [Line Items]
Total	72	76
Construction in progress
Property, Plant and Equipment [Line Items]
Total	$ 9	$ 25

GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill impairment	$ 0	$ 0	$ 0
Accumulated goodwill impairment losses	0	0
Impairment of intangible assets	0	0	0
Amortization of intangible assets	$ 26,000,000	$ 29,000,000	$ 34,000,000

GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Goodwill [Roll Forward]
Beginning Balance	$ 634,000,000	$ 634,000,000
Goodwill acquired during the year	0	0
Ending Balance	634,000,000	634,000,000	$ 634,000,000
Goodwill impairment	$ 0	$ 0	$ 0

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

GOODWILL AND INTANGIBLE ASSETS, NET - Finite Lived Assets and Indefinite Lived Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Assets	$ 241	$ 144
Accumulated Amortization	(80)	(92)
Net	161	52
Total Intangible Assets
Gross Assets	245	145
Accumulated Amortization	(80)	(92)
Net	165	53
Tradename
Finite-Lived Intangible Assets [Line Items]
Indefinite lived assets	4	1
Indefinite-lived Intangible Assets [Line Items]
Tradename	4	1
Customer contracts and lists
Finite-Lived Intangible Assets [Line Items]
Gross Assets	9	9
Accumulated Amortization	(6)	(3)
Net	$ 3	$ 6
Useful Life	3 years	3 years
Total Intangible Assets
Accumulated Amortization	$ (6)	$ (3)
Premium on purchased credit card loan portfolios
Finite-Lived Intangible Assets [Line Items]
Gross Assets	230	133
Accumulated Amortization	(73)	(89)
Net	157	44
Total Intangible Assets
Accumulated Amortization	$ (73)	$ (89)
Premium on purchased credit card loan portfolios \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	4 years	1 year
Premium on purchased credit card loan portfolios \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	13 years	13 years
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Assets	$ 2	$ 2
Accumulated Amortization	(1)	0
Net	$ 1	$ 2
Useful Life	5 years	5 years
Total Intangible Assets
Accumulated Amortization	$ (1)	$ 0

GOODWILL AND INTANGIBLE ASSETS, NET - Maturity Schedule (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Estimated amortization expense related to intangible assets for the next five years and thereafter
2023	$ 41
2024	37
2025	29
2026	24
2027	8
Thereafter	22
Net	$ 161	$ 52

OTHER ASSETS (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Jan. 01, 2020
Other Assets [Line Items]
Deferred tax asset, net	$ 552	$ 302	$ 552
Deferred contract costs	344	364
Accounts receivable, net	164	151
Right of use assets - operating	88	97
Restricted cash	36	877
Investment in Loyalty Ventures Inc.	6	50
Other	210	151
Total other assets	$ 1,400	$ 1,992
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Total other assets	Total other assets
LVI
Other Assets [Line Items]
Accounts receivable, net	$ 49

LEASES (Details)	12 Months Ended
LEASES (Details)	Dec. 31, 2022	Dec. 31, 2021
Lessee, Lease, Description [Line Items]
Weighted-average discount rate : operating leases	5.80%
Weighted-average remaining lease term (in years): operating leases	8 years 9 months 18 days	9 years 9 months 18 days
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	16 years

LEASES - Lease expense (Details) - USD ($) $ in Millions	12 Months Ended
LEASES - Lease expense (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Lease expense
Operating lease cost	$ 17	$ 23	$ 25
Short-term lease cost	0	0	1
Variable lease cost	3	2	2
Sublease income	(7)	(5)	(1)
Total	13	20	27
Supplemental cash flow information related to leases was as follows:
Operating cash flows from operating leases	23	25	28
Operating leases - Right-of-use assets obtained in exchange for lease obligations	$ 0	$ 5	$ 1

LEASES - Maturities of lease liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Lease liabilities
2023	$ 19
2024	20
2025	19
2026	18
2027	16
Thereafter	70
Total undiscounted lease liabilities	162
Less: Amount representing interest	(36)
Total present value of minimum lease payments	$ 126	$ 140

DEPOSITS - Interest and Non-Interest Bearing (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Other Liabilities Disclosure [Abstract]
Interest-Bearing Deposit Liabilities	$ 13,787	$ 11,027
Cardholder credit balances	39	0
Deposits	$ 13,826	$ 11,027

DEPOSITS - Deposits by Type (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Deposit Liability [Line Items]
Certificates of deposit	$ 7,051
Cardholder credit balances	39	$ 0
Deposits	13,826	11,027
Direct-to-consumer (retail)
Deposit Liability [Line Items]
Savings accounts	2,782	1,713
Certificates of deposit	2,684	1,467
Wholesale
Deposit Liability [Line Items]
Savings accounts	3,954	3,873
Certificates of deposit	4,367	3,974
Cardholder credit balances
Deposit Liability [Line Items]
Cardholder credit balances	$ 39	$ 0

DEPOSITS - Maturity of Deposits (Details) $ in Millions	Dec. 31, 2022 USD ($)
Other Liabilities [Abstract]
2023	$ 4,437
2024	1,333
2025	482
2026	234
2027	565
Thereafter	0
Certificates of deposit	7,051
Time deposits, unamortized debt discount	$ 9

DEPOSITS - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Other Liabilities [Abstract]
Time deposits, at or above FDIC insurance limit	$ 822	$ 500

BORROWINGS OF LONG-TERM AND OTHER DEBT - Schedule of Long Term Debt and Other Debt (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Sep. 30, 2020	Sep. 22, 2020	Dec. 31, 2019
Long-term and other debt:
Long-term and other debt	$ 1,906
Less: Unamortized discount and debt issuance costs	14
Total long-term and other debt	1,892	$ 1,986
Debt issued by consolidated VIEs:
Less: Unamortized debt issuance costs	0
Total debt issued by consolidated VIEs	6,115	5,453
Long-term debt	8,007	7,439
Long-term and other debt
Long-term and other debt:
Long-term and other debt	1,906	2,008
Less: Unamortized discount and debt issuance costs	14	22
Total long-term and other debt	1,892	1,986
Senior Notes Due 2024 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 850	850
Debt issued by consolidated VIEs:
Interest Rates	4.75%				4.75%
Senior Notes Due 2026 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 500	500
Debt issued by consolidated VIEs:
Interest Rates	7.00%		7.00%	7.00%
Debt issued by consolidated VIEs
Debt issued by consolidated VIEs:
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement	$ 6,115	5,455
Less: Unamortized debt issuance costs	0	2
Total debt issued by consolidated VIEs	6,115	5,453
Fixed rate asset-backed term note securities
Debt issued by consolidated VIEs:
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement	0	1,572
Conduit asset-backed securities
Debt issued by consolidated VIEs:
Principal Amount Outstanding on Loans Securitized or Asset-backed Financing Arrangement	$ 6,115	$ 3,883
Conduit asset-backed securities \| Minimum \| SOFR
Debt issued by consolidated VIEs:
Basis spread	5.08%	0.89%
Conduit asset-backed securities \| Maximum \| SOFR
Debt issued by consolidated VIEs:
Basis spread	5.93%	0.96%
Revolving Credit Facility \| Line of Credit
Long-term and other debt:
Long-term and other debt	$ 0	$ 0
Secured Debt \| Line of Credit
Long-term and other debt:
Long-term and other debt	$ 556	$ 658
Secured Debt \| Line of Credit \| Weighted Average \| SOFR
Debt issued by consolidated VIEs:
Basis spread	3.24%	1.85%

BORROWINGS OF LONG-TERM AND OTHER DEBT - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Jun. 30, 2022	Apr. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2020	Sep. 22, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term and other debt	$ 1,906,000,000
Asset backed term notes
Debt Instrument [Line Items]
Amount borrowed	0
Debt repaid by the company	1,600,000,000
Retained amount of subordinated class of notes	74,000,000
Line of Credit \| Secured Debt
Debt Instrument [Line Items]
Long-term and other debt	556,000,000				$ 658,000,000
Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Long-term and other debt	0				0
Maximum borrowing capacity	750,000,000
Senior Notes Due 2024 \| Senior Notes
Debt Instrument [Line Items]
Long-term and other debt	$ 850,000,000				850,000,000
Principal amount of debt								$ 850,000,000
Stated interest rate	4.75%							4.75%
Senior Notes Due 2026 \| Senior Notes
Debt Instrument [Line Items]
Long-term and other debt	$ 500,000,000				$ 500,000,000
Principal amount of debt						$ 500,000,000
Stated interest rate	7.00%					7.00%	7.00%
Conduit asset-backed securities \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 6,500,000,000	$ 1,000,000,000	$ 275,000,000	$ 225,000,000
Reduction in credit facility	2,100,000,000
Long-term line of credit	$ 6,100,000,000
2009-VFN Conduit Facility \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 2,500,000,000	$ 1,500,000,000

BORROWINGS OF LONG-TERM AND OTHER DEBT - Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Long-term and other debt:
2023	$ 152
2024	1,254
2025	0
2026	500
2027	0
Thereafter	0
Long-term and other debt	1,906
Unamortized debt issuance costs	(14)
Total long-term and other debt	1,892	$ 1,986
Debt issued by consolidated VIEs:
2023	6,115
2024	0
2025	0
2026	0
2027	0
Thereafter	0
Total maturities	6,115
Unamortized debt issuance costs	0
Total debt issued by consolidated VIEs	6,115	$ 5,453
2023	6,267
2024	1,254
2025	0
2026	500
2027	0
Thereafter	0
Total maturities	8,021
Unamortized debt issuance costs	(14)
Long-term debt and other debt	$ 8,007

OTHER LIABILITIES (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Other Liabilities [Abstract]
Accounts payable and other brand partner liabilities	$ 398	$ 291
Accrued liabilities	306	314
Long-term tax reserves	306	313
Operating lease liabilities	126	140
Other	173	136
Total other liabilities	$ 1,309	$ 1,194
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Total other liabilities	Total other liabilities

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Other Noninterest Income [Abstract]
Payment protection products	$ 154	$ 141	$ 156
Loss from equity method investment	(44)	2	0
Other	4	13	21
Total other non-interest income	114	156	177
Other Noninterest Expenses [Abstract]
Professional services and regulatory fees	142	136	114
Asset impairment charges	0	0	64
Other	85	86	108
Total other non-interest expense	$ 227	$ 222	$ 286

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value of Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Financial assets
Credit card and other loans, net	$ 21,328	$ 17,989
Investment securities	221	239
Financial liabilities
Deposits	13,731	11,135
Debt issued by consolidated variable interest entities	6,115	5,467
Carrying Amount
Financial assets
Credit card and other loans, net	18,901	15,567
Investment securities	221	239
Financial liabilities
Deposits	13,826	11,027
Debt issued by consolidated variable interest entities	6,115	5,453
Long-term and other debt	1,892	1,986
Fair Value
Financial assets
Credit card and other loans, net	21,328	17,989
Investment securities	221	239
Financial liabilities
Deposits	13,731	11,135
Debt issued by consolidated variable interest entities	6,115	5,467
Long-term and other debt	$ 1,759	$ 2,053

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value Level Disclosure (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Assets disclosed at fair value
Investment securities	$ 221	$ 239
Total assets measured at fair value	221	239
Level 1
Assets disclosed at fair value
Investment securities	44	48
Total assets measured at fair value	44	48
Level 2
Assets disclosed at fair value
Investment securities	177	191
Total assets measured at fair value	177	191
Level 3
Assets disclosed at fair value
Investment securities	0	0
Total assets measured at fair value	$ 0	$ 0

FAIR VALUES OF FINANCIAL INSTRUMENTS - Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Financial assets
Credit card and other loans, net	$ 21,328	$ 17,989
Total assets measured at fair value	21,328	17,989
Financial liabilities
Deposits	13,731	11,135
Debt issued by consolidated VIEs	6,115	5,467
Long-term and other debt	1,759	2,053
Total liabilities measured at fair value	21,605	18,655
Level 1
Financial assets
Credit card and other loans, net	0	0
Total assets measured at fair value	0	0
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total liabilities measured at fair value	0	0
Level 2
Financial assets
Credit card and other loans, net	0	0
Total assets measured at fair value	0	0
Financial liabilities
Deposits	13,731	11,135
Debt issued by consolidated VIEs	6,115	5,467
Long-term and other debt	1,759	2,053
Total liabilities measured at fair value	21,605	18,655
Level 3
Financial assets
Credit card and other loans, net	21,328	17,989
Total assets measured at fair value	21,328	17,989
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total liabilities measured at fair value	$ 0	$ 0

FAIR VALUES OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment carrying amount	$ 6	$ 50
Asset impairment charges	0	0	$ 64
Loyalty Ventures Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity method investment, other than temporary impairment	(44)
Investment carrying amount	6
Equity method investments, fair value	$ 11
Asset impairment charges		$ 0

COMMITMENTS AND CONTINGENCIES - Regulatory Matters and Cardholders (Details) $ in Millions		1 Months Ended		12 Months Ended
	Jan. 19, 2021 USD ($) installment	Jan. 31, 2022 USD ($)	Jan. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2022
Comenity Bank
Tier 1 capital to average assets
Tier 1 capital to average assets, Actual Ratio					0.184
Tier 1 capital to average assets, Minimum Ratio for Capital Adequacy Purposes					0.060
Tier 1 capital to average assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					0.080
Common Equity Tier 1 capital to risk-weighted assets
Common equity tier 1 capital to risk-weighted assets, actual ratio					0.184
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					4.50%
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					6.50%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital to risk-weighted assets, Actual Ratio					0.197
Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					0.080
Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					0.100
Total capital to risk-weighted assets, Actual Ratio					0.167
Total capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					0.040
Total capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under prompt Corrective Action					0.050
Comenity Capital Bank
Tier 1 capital to average assets
Tier 1 capital to average assets, Actual Ratio					0.161
Tier 1 capital to average assets, Minimum Ratio for Capital Adequacy Purposes					0.045
Tier 1 capital to average assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					0.065
Common Equity Tier 1 capital to risk-weighted assets
Common equity tier 1 capital to risk-weighted assets, actual ratio					0.161
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					6.00%
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					8.00%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital to risk-weighted assets, Actual Ratio					0.174
Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					0.080
Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					0.100
Total capital to risk-weighted assets, Actual Ratio					0.149
Total capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					0.040
Total capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under prompt Corrective Action					0.080
Combined Banks
Tier 1 capital to average assets
Tier 1 capital to average assets, Actual Ratio					0.170
Tier 1 capital to average assets, Minimum Ratio for Capital Adequacy Purposes					0.045
Tier 1 capital to average assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					0.065
Common Equity Tier 1 capital to risk-weighted assets
Common equity tier 1 capital to risk-weighted assets, actual ratio					0.170
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					6.00%
Common Equity Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					8.00%
Banking Regulation, Risk-Based Information [Abstract]
Tier 1 capital to risk-weighted assets, Actual Ratio					0.183
Tier 1 capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					0.080
Tier 1 capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions					0.100
Total capital to risk-weighted assets, Actual Ratio					0.156
Total capital to risk-weighted assets, Minimum Ratio for Capital Adequacy Purposes					0.040
Total capital to risk-weighted assets, Minimum Ratio to be Well Capitalized under prompt Corrective Action					0.050
Discontinued Operations, Disposed of by Sale
Contingencies
Loss contingency, loss in period				$ 150
Epsilon \| Discontinued Operations, Disposed of by Sale
Contingencies
Loss contingency, total	$ 150
Number of installment payments \| installment	2
Loss contingency, payment		$ 75	$ 75

EMPLOYEE BENEFIT PLANS (Details) - USD ($)	12 Months Ended
EMPLOYEE BENEFIT PLANS (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2016	Jul. 01, 2015	Jul. 20, 2001
Pension Plan
Defined Contribution Plan Disclosure [Line Items]
Number of shares available for issuance	241,603
Service period after which employees begin receiving employer matching contribution	180 days
Service period after which seasonal employees begin receiving employer matching contribution	12 months
Minimum age limit of employees covered by the plan	18 years
Percentage of employees' contribution matched by employer	5.00%
Company's matching and discretionary contributions	$ 17,000,000	$ 15,000,000	$ 16,000,000
Number of shares registered for issuance						1,500,000
Supplemental Employee Retirement Plan
Defined Contribution Plan Disclosure [Line Items]
Vested percentage	100.00%
Deferred compensation liability	$ 20,000,000	$ 18,000,000
2015 Employee Stock Purchase Plan \| Employee Stock
Defined Contribution Plan Disclosure [Line Items]
Maximum amount of common stock permitted to be purchased annually per employee	$ 25,000
Maximum percentage of voting power after purchase of common stock under ESPP	5.00%
Offering period under ESPP	6 months
Purchase price of common stock as a percentage of fair market value of shares	85.00%
Number of shares available for issuance	768,551			1,441,327	1,000,000
Number of shares issued under the ESPP	100,951
Weighted-average issue price of shares issued under the ESPP (in dollars per share)	$ 31.48
Number of shares issued under the ESPP since the inception of the plan	672,776
2005 Employee Stock Purchase Plan \| Employee Stock
Defined Contribution Plan Disclosure [Line Items]
Number of shares available for issuance				441,327

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions		12 Months Ended
	Jan. 10, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		$ 2,086	$ 1,522	$ 1,589
Changes in other comprehensive income (loss)		(19)	(56)	91
Ending balance		2,265	2,086	1,522
Precima
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Recognition of foreign currency translation adjustments upon sale of business	$ 4			4
LoyaltyOne
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Recognition of foreign currency translation adjustments upon sale of business			59
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(2)	(5)	(100)
Ending balance		(21)	(2)	(5)
Net Unrealized Gains (Losses) on AFS Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		1	23	2
Changes in other comprehensive income (loss)		(19)	(21)	21
Recognition of foreign currency translation adjustments upon sale of business			(1)	0
Ending balance		(18)	1	23
Net Unrealized Losses on Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		0	(1)	0
Changes in other comprehensive income (loss)		0	2	(1)
Recognition of foreign currency translation adjustments upon sale of business			(1)	0
Ending balance		0	0	(1)
Net Unrealized Losses on Net Investment Hedge
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		0	(7)	(7)
Changes in other comprehensive income (loss)		0	0	0
Recognition of foreign currency translation adjustments upon sale of business			7	0
Ending balance		0	0	(7)
Foreign Currency Translation (Losses) Gains
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(3)	(20)	(95)
Changes in other comprehensive income (loss)		0	(37)	71
Recognition of foreign currency translation adjustments upon sale of business			54	4
Ending balance		$ (3)	$ (3)	$ (20)

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS - Narrative (Details) - USD ($) $ in Millions			12 Months Ended
	Nov. 05, 2021	Jan. 10, 2020	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net unrealized loss			$ 0	$ (7)	$ 0
LoyaltyOne
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net unrealized loss	$ (7)
Recognition of foreign currency translation adjustments upon sale of business				$ (59)
Precima
Accumulated Other Comprehensive Income (Loss) [Line Items]
Recognition of foreign currency translation adjustments upon sale of business		$ (4)			$ (4)

STOCKHOLDERS' EQUITY - Stock Repurchase Programs (Details) - USD ($)	1 Months Ended	12 Months Ended
	Mar. 30, 2022	Dec. 31, 2022	Feb. 28, 2022	Jul. 01, 2020	Jul. 01, 2015
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares to be repurchased (in shares)			200,000
Stock repurchase program, period in force		1 year
Number of shares repurchased	200,000	200,000
Total cost of shares repurchased	$ 12,000,000	$ 12,000,000
2015 Omnibus Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares of common stock reserved for grant					5,100,000
2020 Omnibus Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares of common stock reserved for grant				2,400,000
Maximum award amount		$ 1,000,000

STOCKHOLDERS' EQUITY - Stock Compensation Plans (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Jun. 22, 2022
Stockholders' Equity Note [Abstract]
Stock-based compensation expense	$ 32	$ 25	$ 15
Income tax benefits related to stock-based compensation expense	$ 5	$ 4	$ 3
Forfeiture rate (as a percent)	5.00%	5.00%	5.00%
Unrecognized expenses	$ 55
Approximate weighted average period for recognizing expenses	2 years 2 months 12 days
Common stock reserved for future issuance				3,075,000

STOCKHOLDERS' EQUITY - Restricted Stock Unit Awards and Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions			1 Months Ended	12 Months Ended
	Jan. 26, 2023	Jul. 30, 2021	Nov. 30, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Dividends
Common Stock dividends and dividend equivalent rights declared (in dollars per share)				$ 0.84	$ 0.84	$ 1.26
Dividends declared				$ 43	$ 42	$ 60
Dividends paid				43	42	61
Retirement of treasury stock					$ 0
Common Stock
Dividends
Treasury stock, shares retired		67,400,000			67,000,000
Treasury Stock
Dividends
Retirement of treasury stock		$ 6,733
Retained Earnings (Accumulated Deficit)
Dividends
Dividends declared				$ 43	$ 42	$ 60
Retirement of treasury stock		(5,453)			5,453
Additional Paid-In Capital
Dividends
Retirement of treasury stock		$ (1,280)			$ 1,280
Restricted Stock Units (RSUs) [Member]
Number of Shares
Balance at the beginning of the period (in shares)				759,435	577,267	513,132
Shares granted (in shares)				848,691	888,245	481,566
Shares vested (in shares)				(227,060)	(192,400)	(170,018)
Shares forfeited (in shares)				(108,457)	(513,677)	(247,413)
Balance at the end of the period (in shares)				1,272,609	759,435	577,267
Outstanding and Expected to Vest (in shares)				1,238,212
Weighted Average Fair Value
Balance at the beginning of the period (in dollars per share)				$ 89.14	$ 103.89	$ 172.06
Shares granted (in dollars per share)				63.22	88.18	89.11
Shares vested (in dollars per share)				78.23	118.78	175.09
Shares forfeited (in dollars per share)				65.83	93.16	166.93
Balance at the end of the period (in dollars per share)				68.86	$ 89.14	$ 103.89
Outstanding and Expected to Vest (in dollars per share)				$ 69.17
Restricted stock, additional disclosures
Total fair value of units vested				$ 18	$ 23	$ 30
Aggregate intrinsic value of units outstanding and expected to vest				$ 47
Market-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)				19,067	22,227	24,288
Shares granted (in shares)				0	2,641	20,770
Shares vested (in shares)				0	0	0
Shares forfeited (in shares)				(19,067)	(5,801)	(22,831)
Balance at the end of the period (in shares)				0	19,067	22,227
Restricted stock, additional disclosures
Attainment percentage				100.00%	100.00%	100.00%
Increase in granted shares			2,641
Performance-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)				91,416	221,226	230,272
Shares granted (in shares)				82,513	111,542	219,186
Shares vested (in shares)				(8,983)	(24,677)	(42,097)
Shares forfeited (in shares)				0	(216,675)	(186,135)
Balance at the end of the period (in shares)				164,946	91,416	221,226
Restricted stock, additional disclosures
Attainment percentage				100.00%	100.00%	100.00%
Increase in granted shares			12,659
Stock Compensation Plans, Additional Disclosures
Award vesting period				3 years
Service-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)				648,952	333,814	258,572
Shares granted (in shares)				766,178	774,062	241,610
Shares vested (in shares)				(218,077)	(167,723)	(127,921)
Shares forfeited (in shares)				(89,390)	(291,201)	(38,447)
Balance at the end of the period (in shares)				1,107,663	648,952	333,814
Restricted stock, additional disclosures
Increase in granted shares			96,556
Stock Compensation Plans, Additional Disclosures
Award vesting period				3 years
Subsequent Event
Dividends
Common Stock dividends and dividend equivalent rights declared (in dollars per share)	$ 0.21
Minimum \| Performance-based restricted stock unit awards
Stock Compensation Plans, Additional Disclosures
Earned percentage				0.00%
Maximum \| Performance-based restricted stock unit awards
Stock Compensation Plans, Additional Disclosures
Earned percentage				150.00%

INCOME TAXES - Schedule of Components of Tax (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Current
Federal	$ 280	$ 218	$ 228
State	41	49	36
Total current income tax expense	321	267	264
Federal
Federal	(201)	(13)	(143)
State	(44)	(7)	(28)
Total deferred income tax benefit	(245)	(20)	(171)
Total Provision for income taxes	$ 76	$ 247	$ 93

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

INCOME TAXES - Reconciliation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Expected expense at statutory rate	$ 63	$ 219	$ 63
(Decrease) increase in income taxes resulting from:
State and local income taxes, net of federal benefit	(2)	33	6
Impact of 2017 Tax Reform	0	(8)	(2)
Non-deductible expenses	6	4	6
IRC Section 199, net of tax reserves	4	0	12
Basis difference in unconsolidated subsidiaries	(8)	0	0
Valuation allowance	16	0	0
Other	(3)	(1)	8
Total Provision for income taxes	$ 76	$ 247	$ 93

INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating Loss Carryforwards [Line Items]
IRC Section 199, net of tax reserves	$ 4	$ 0	$ 12
Basis difference in unconsolidated subsidiaries	8	0	0
Valuation allowance	16	0	0
Impact of 2017 Tax Reform	0	(8)	(2)
Cumulative interest and penalties with respect to unrecognized tax benefits	74	76	69
Potential interest and penalties with respect to unrecognized tax benefits	(1)	8	9
Unrecognized tax benefits, if recognized, would impact effective tax rate	238	$ 241	$ 243
Capital Loss Carryforward
Operating Loss Carryforwards [Line Items]
Capital loss carryforward	7
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers	124
Foreign Tax Authority
Operating Loss Carryforwards [Line Items]
Tax credits	34
State and Local Jurisdiction
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers	231
Tax credits	$ 2

INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Jan. 01, 2020
Deferred tax assets
Deferred revenue	$ 14	$ 17
Allowance for credit losses	598	447
Net operating loss carryforwards and other carryforwards	39	42
Operating lease liabilities	30	33
Accrued expenses and other	88	65
Total deferred tax assets	769	604
Valuation allowance	(26)	(8)
Deferred tax assets, net of valuation allowance	743	596
Deferred tax liabilities
Deferred income	148	221
Depreciation	7	28
Right of use assets	20	22
Intangible assets	16	23
Total deferred tax liabilities	191	294
Net deferred tax assets	$ 552	$ 302	$ 552

INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Balance at the beginning of the period	$ 247	$ 255	$ 215
Increases related to prior years’ tax positions	8	1	59
Decreases related to prior years’ tax positions	(25)	(13)	(23)
Increases related to current year tax positions	14	12	11
Settlements during the period	(2)	(8)	(5)
Lapses of applicable statutes of limitation			(2)
Balance at the end of the period	$ 242	$ 247	$ 255

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Income from continuing operations	$ 224	$ 797	$ 208
(Loss) income from discontinued operations, net of income taxes	(1)	4	6
Net income	$ 223	$ 801	$ 214
Denominator:
Basic: Weighted average common stock (in shares)	49.9	49.7	47.8
Net effect of dilutive unvested restricted stock awards (in shares)	0.1	0.3	0.1
Denominator for diluted calculation (in shares)	50.0	50.0	47.9
Basic EPS
Income from continuing operations (in dollars per share)	$ 4.48	$ 16.02	$ 4.36
(Loss) income from discontinued operations, net of income taxes (in dollars per share)	(0.01)	0.07	0.11
Net income per share (in dollars per share)	4.47	16.09	4.47
Diluted EPS
Income from continuing operations (in dollars per share)	4.47	15.95	4.35
(Loss) income from discontinued operations, net of income taxes (in dollars per share)	(0.01)	0.07	0.11
Net income per share (in dollars per share)	$ 4.46	$ 16.02	$ 4.46

SUPPLEMENTAL CASH FLOW INFORMATION - Cash and Cash Equivalents Reconciliation (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract]
Cash and cash equivalents	$ 3,891	$ 3,046
Restricted Cash included within Other Assets	36	877
Total cash, cash equivalents and restricted cash	$ 3,927	$ 3,923	$ 3,463	$ 3,958

SUPPLEMENTAL CASH FLOW INFORMATION - Narrative (Details) $ in Millions	Dec. 31, 2021 USD ($)
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff
Schedule of Equity Method Investments [Line Items]
Equity method investment	$ 48

DISCONTINUED OPERATIONS - LoyaltyOne (Details) $ in Millions		12 Months Ended
	Nov. 05, 2021	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Investment carrying amount		$ 6	$ 50
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff \| Loyalty Ventures
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership interest	19.00%	19.00%
LoyaltyOne
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Conversion ratio	0.4
LoyaltyOne \| Discontinued Operations, Disposed of by Means Other than Sale, Spinoff
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Percentage of shares distributed to common stockholders	81.00%
Disposal Group, Including Discontinued Operation, Income Statement Disclosures
Total interest income		$ 0	1	$ 1
Total interest expense		0	11	17
Net interest income		0	(10)	(16)
Total non-interest income		0	574	765
Total non-interest expenses		1	519	656
Income before provision from income taxes		(1)	45	93
Provision for income taxes		0	36	6
Income from discontinued operations, net of income taxes		(1)	9	87
Mandatory payment per credit agreement		725
Disposal Group, Including Discontinued Operation, Additional Disclosures
Depreciation and amortization		0	31	78
Capital expenditures		$ 0	$ 15	$ 24

PARENT COMPANY FINANCIAL STATEMENTS (Details) - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Assets:
Cash and cash equivalents	$ 3,891	$ 3,046
Investment in LVI	6	50
Other assets	1,400	1,992
Total assets	25,407	21,746
Liabilities:
Long-term and other debt	1,892	1,986
Other liabilities	1,309	1,194
Total liabilities	23,142	19,660
Stockholders’ equity	2,265	2,086	$ 1,522	$ 1,589
Total liabilities and stockholders’ equity	25,407	21,746
Statements of Income
Total interest income	4,684	3,868	3,952
Total interest expense	503	383	499
Net interest income	4,181	3,485	3,453
Loss from equity method investment	(44)	2	0
Total net interest and non-interest income	3,826	3,272	3,298
Total non-interest expenses	1,932	1,684	1,731
Income from continuing operations before income taxes	300	1,044	301
Benefit for income taxes	(76)	(247)	(93)
Net income	223	801	214
Other comprehensive (loss) income
Net income	223	801	214
Other comprehensive income, net of tax	(19)	3	95
Total comprehensive income, net of tax	204	804	309
Statements of Cash Flows
Net cash (used in) provided by operating activities	1,848	1,543	1,883
Investing activities:
Net cash (used in) provided by investing activities	(5,111)	(1,691)	1,774
Financing activities:
Debt proceeds from spinoff of LVI	0	652	0
Payment of deferred financing costs	(13)	(13)	(19)
Dividends paid	(43)	(42)	(61)
Other	(15)	(4)	4
Net cash provided by (used in) financing activities	3,267	608	(4,167)
Change in cash, cash equivalents and restricted cash	4	460	(495)
Cash, cash equivalents and restricted cash at end of period	3,927	3,923	3,463
Cash, cash equivalents and restricted cash at beginning of period	3,923	3,463	3,958
Parent Company
Assets:
Cash and cash equivalents	5	0
Investment in subsidiaries	4,159	4,446
Investment in LVI	6	50
Other assets	119	123
Total assets	4,289	4,619
Liabilities:
Long-term and other debt	1,892	1,985
Intercompany liabilities, net	86	482
Other liabilities	46	66
Total liabilities	2,024	2,533
Stockholders’ equity	2,265	2,086
Total liabilities and stockholders’ equity	4,289	4,619
Statements of Income
Total interest income	11	12	13
Total interest expense	107	103	110
Net interest income	(96)	(91)	(97)
Dividends from subsidiaries	382	535	256
Loss from equity method investment	(44)	0	0
Total net interest and non-interest income	242	444	159
Total non-interest expenses	1	1	1
Income from continuing operations before income taxes	241	443	158
Benefit for income taxes	22	36	21
Income before equity in undistributed net income of subsidiaries	263	479	179
Equity in undistributed net (loss) income of subsidiaries	(40)	322	35
Net income	223	801	214
Other comprehensive (loss) income
Net income	223	801	214
Other comprehensive income, net of tax	(3)	7	0
Total comprehensive income, net of tax	220	808	214
Statements of Cash Flows
Net cash (used in) provided by operating activities	(219)	(398)	(138)
Investing activities:
Investment in subsidiaries	0	0	(3)
Dividends received	383	533	256
Purchases of available-for-sale securities	0	(10)	0
Net cash (used in) provided by investing activities	383	523	253
Financing activities:
Debt proceeds from spinoff of LVI	0	750	0
Borrowings under debt agreements	218	38	1,276
Repayments of borrowings	(319)	(864)	(1,320)
Payment of deferred financing costs	0	(4)	(9)
Dividends paid	(43)	(42)	(61)
Other	(15)	(3)	(1)
Net cash provided by (used in) financing activities	(159)	(125)	(115)
Change in cash, cash equivalents and restricted cash	5	0	0
Cash, cash equivalents and restricted cash at end of period	5	0	0
Cash, cash equivalents and restricted cash at beginning of period	$ 0	0	$ 0
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff
Non-cash investing items
Equity method investment		$ 48
Bread
Non-cash investing items
Equity consideration shares of common stock			1.9

Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2016-13 [Member]

- Definition

Indicates amendment to accounting standards.

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+ Details