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Once you have obtained excellent credit, it is necessary for you to protect it.                                             

Financial Glossary
Understanding Financial, Credit, & Real Estate Terms


 A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | XYZ  

Real economy  —  The physical side of the economy dealing with goods, services and resources. This side is concerned with using resources to produce the goods and services that make the satisfaction of wants and needs possible.

Real GDP   —  GDP (gross domestic product) adjusted for inflation. Real GDP provides the value of GDP in constant dollars, which is used as an indicator of the volume of the nation's output.

Real interest rates  —  Interest rates adjusted for the expected erosion of purchasing power resulting from inflation. Technically defined as nominal interest rates minus the expected rate of inflation.

Recession  —  A significant decline in general economic activity extending over a period of time. Usually declared after two consecutive quarters of declining gross domestic products.

Redlining  —  A practice in which certain areas of a community are eliminated from eligibility for mortgages or other loans, either intentionally or unintentionally, allegedly because the area is considered a poor investment risk.

Reform  —  A movement that attempts to institute improved social and political conditions without revolutionary change.

Regional Check Processing Center (RCPC)   —  A Federal Reserve check processing operation that clears checks drawn on depository institutions located within a specified area. RCPCs expedite collection and settlement of checks within the area on an overnight basis.

Regulation  —  A principle rule, or law designed to control or govern.

Renegotiable rate  —  A type of variable rate involving a renewable short-term "balloon" note. The interest rate on the loan is generally fixed during the term of the note, but when the balloon comes due, the lender may refinance it at a higher rate. In order for the loan to be fully amortized, periodic refinancing may be necessary.

Report of Condition and Income  —  Financial report that all banks, bank holding companies, savings and loan associations, Edge Act and agreement corporations, and certain other types of organizations must file with a federal regulatory agency. Informally termed a call report.

Repurchase agreements   —  An agreement by which, for example, the Federal Reserve purchases a security for immediate delivery and receives interest at a specific rate from a government securities dealer, with an agreement to sell the security back at the same price by a specific date (usually within 15 days). This arrangement allows the Federal Reserve to inject reserves into the banking system on a temporary basis to meet a temporary need and to withdraw these reserves as soon as that need has passed.

Required reserve balance  —  Portion of its required reserves that a depository institution must hold in an account at a Federal Reserve Bank.

Required reserves  —  Funds that a depository institution is required to maintain as vault cash or on deposit with a Federal Reserve Bank; required amount varies according to required reserve ratios set by the Board of Governors and the volume of reservable liabilities held by the institutions.

Reserve requirements  —  Requirements set by the Federal Reserve Board of Governors for the amounts that certain financial institutions must set aside in the form of reserves. Reserve requirements act as a control on the expansion of money and credit and may be raised or lowered within limits specified by law (lowering reserve requirements allows more bank lending and money growth; raising requirements, less lending and money growth).

Reserves  —  A depository institution's vault cash (up to the level of its required reserves) plus balances in its reserve account (not including funds applied to its required clearing balance).

Return   —  The profit made on an investment.

Revenue bond  —  A type of municipal bond backed by revenue from the project the bond finances.

Risk  —  The possibility of loss on an investment.

Rule of 78 - This method of calculating interest is based on a mathematical formula to determine how much interst you have paid at any point during a loan.  It requires that you pay more interest at the beginning of a loan when you have the use of more of the money and that you pay less interest as the debt is reduced.  Since all of your payments are the same in amount, the amount of your payment that is going toward the principal while the amount going toward interest decreases.  State law may mandate the use of the Rule of 78.