Expressing the sense of the House of Representatives that the Federal banking regulators should, with respect to well-managed community-based depository institutions, permit appropriate capital forbearance, troubled debt restructuring accounting practices, and other time-tested measures that would allow such institutions to continue to provide for the financial vitality for our Nation's small businesses and family farms.

Expresses the sense of the House that all state and federal agencies which regulate community-based depository institutions should develop policies that permit such institutions that are well-managed to: (1) maintain capital temporarily at levels less than that currently required, conditioned upon regulatory approval of an appropriate plan to restore capital levels by a date certain; and (2) account temporarily for troubled debt restructuring in a manner which allows a loan to be carried on the institution's books without loss recognition if the loan is formally restructured so that the borrower can repay it, and the total future cash payments equal the loan amount on the institution's books.

States that such federal and state regulatory agencies should: (1) ensure that field examiners are not inappropriately classifying loans based on judgment about currently stressed sectors apart from the ability of the loans to show likelihood of repayment based on positive cash flows, ample amounts of collateral, and other mitigating factors; and (2) include additional temporary accommodations to assist well-managed community-based depository institutions in remaining vital sources of financial strength for their communities, while maintaining needed standards to assure the continued financial integrity of those institutions and communities.