WASHINGTON - In the arcane world of tax law, Henry Ruempler is one of the banking industry's chief interpreters.
"A lot of my business is translating," said the American Bankers Association's top tax lawyer.
"When I am working on the legislative side, I spend my time going up to the Hill and saying, here is how your bill will affect bank operations and bank practices," he added in a recent interview.
Once the bill is passed, he said, "I have to take the law and translate it for bankers in terms that relate to their practices and operations."
Mark-to-Market Ruling
Those skills became crucial in the weeks following passage of the budget bill last summer, when it suddenly became apparent that Treasury intended to require banks to comb through their portfolios in search of assets subject to market-value accounting.
The provision had gone all but unnoticed while the bill moved through Congress, and nobody thought it would apply as broadly or quickly as the administration decided it would.
Mr. Ruempler discovered the administration's intentions almost by accident while at a meeting of tax lawyers. He happened to be talking to a Treasury official about issues banks would need guidance on with passage of the budget act and he was shocked at the official's response.
"His comment was, you're going to have to go through your whole balance sheet within 30 days," Mr. Ruempler recalled.
Spreading the Word
With that warning, Mr. Ruempler put a seven-line alert on the ABA's fax network, closing with a suggestion: "Call if you have any questions."
The next morning, Mr. Ruempler said, his office was flooded with calls from worried bankers. All together, 1,300 calls came in during the first two days and another 500 in the following eight days.
The ABA and other bank trade groups began lobbying the administration, and their efforts paid off. The Sept. 9 deadline was extended to Oct. 31 - time enough to comply with the new rules.
"I was able to recount to Treasury the nature of the bankers' response and the confusion, and that provided the basis for the extension," Mr. Ruempler recalled in a recent interview.
Onetime Senate Staffer
A neat, trim man with a quick smile, Mr. Ruempler has served two tours of duty at the ABA totaling nearly 11 years. His prior experience included a stint with Citicorp and six years of service on Capitol Hill, most of them in the office of Sen. Thad Cochran, D-Miss., a lawmaker of legendary legislative skills.
"He was a very exceptional inside player," Mr. Ruempler recalled. "I learned a great deal about handling issues both with other Senate staff and and members of Congress."
It was an appropriate training ground, since inside ball is the game tax lobbyists play. Unlike other panels where issues are debated and voted on in public sessions, the House Ways and Means Committee disappears behind closed doors to do its work and emerges for public votes only after the tough decisions have been made.
Cultivating Advocates
As a result, it's important to identify a few lawmakers who are willing to take the time to understand banking issues and serve as advocates once the doors close.
It doesn't help, Mr. Ruempler said, that banking issues tend to be more arcane than those affecting other industries, and a lower priority for most lawmakers.
"The thing I run into is that, while they are very knowledgeable about tax law and very knowledgeable about business in general - like General Electric or General Motors - they are not familiar with a bank balance sheet or bank operations," Mr. Ruempler noted.
"So you've got to get them over that unfamiliarity," he added. "You have to take the time to show them what it is a bank does and how they will be affected by a provision."
Executive Branch Shortcomings
And legislators aren't the only problem, Mr. Ruempler said. The executive branch has its own shortcomings, particularly when sister agencies such as the Internal Revenue Service and the Office of the Comptroller of the Currency work at cross purposes.
"A few years ago, I was working with the tax counsel at Treasury on bond mutual funds," he recalled. "I said, |Do you know that the OCC changed their rules to allow banks to buy these?' He said, |No, who do you talk to, can you have him call me?"
With Congress out of town, Mr. Ruempler is turning his attention to regulatory issues, including some stemming from the recent tax bill.
A key concern is to persuade the IRS to adopt a rule that limits liability for banks that make reasonable efforts to comply with the new mark-to-market rules.
"Then, if IRS decides a year later that you need to do something different, at least you won't be penalized for what you did before," he said.
Mr. Ruempler, his wife, Susan, and their two children live in the northern Virginia suburbs of Washington, where Mr. Ruempler spends his off-duty hours as "a full-time Dad and a part-time golfer."
