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Regulatory Accounting Principles (RAP)

Definition
A set of accounting rules and regulations intended to help savings and loan associations with low net worth meet capital requirements. Though well-intended, the relaxed requirements contributed to the savings and loans crisis of the 1980s by allowing insolvent S&Ls; to inflate their net worth. RAP rules were replaced with stricter standards by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

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