Kelly Cochran is a stealth force in the financial markets.

As the assistant director of regulations at the Consumer Financial Protection Bureau, Cochran is among a handful of people who vets every rule that comes out of the agency, arguably the most active federal financial regulator in recent years. Though Cochran often downplays her role and refers to a team effort in interviews, colleagues describe her as one of the industry's most influential yet unnoticed players.

"If you think about the highest-impact people in the industry who most have not heard of, Kelly Cochran might be at the top of that list," says Raj Date, managing partner at Fenway Summer and a former acting head of the CFPB, who oversaw Cochran in the agency's infancy. "There has been no public rule that came out of the CFPB that she has not had a hand in."

One of the most significant changes for lenders and arguably the most challenging task that the CFPB has undertaken since its July 2011 formation is a series of mortgage rules that Congress mandated to have finalized by January 2013. Among those rules is a requirement that lenders verify consumers have the ability to repay a mortgage or meet certain higher standards for a so-called qualified mortgage, which provides some legal protection for lenders in return. Other CFPB rules restrict loan officer compensation and establish stronger servicing standards for mortgages.

Cochran and her team headed these efforts, which received heavy criticism at the outset. Industry proponents and some lawmakers argued that the rules, which took effect in January 2014, would restrict access to credit and force smaller lenders out of the market. Despite predictions of doom, however, the mortgage market continues to expand nearly two years later, and the CFPB has made several tweaks to the rules to help ease the compliance burden.

Just getting to that stage was a difficult feat as Cochran and her team were still helping to set up the agency while also trying to draft the sweeping rules. Each one ultimately ran hundreds of pages and had to include a detailed analysis of the many outside comments received.

"The biggest single challenge was getting through the initial rulemaking as we were building out the agency," Cochran says in an interview. "We had tight timelines and a tremendous amount to do. There were a number of mortgage rules that were interacting with each other and in close proximity to each other in terms of space. That was definitely the most intensive and challenging single phase that we've had."

The work also attracted a high level of scrutiny, as the industry and lawmakers pored over each iteration of the rules.

"The mortgage rulemakings were one of those rare moments where you had to churn out a gigantic work effort in very little time while maintaining quality control," Date says. "That moment doesn't happen often in a professional lifespan and she showed the ability to rise to the occasion, work insanely hard, manage a team; and all with little or no reward."

To top it all off, Cochran had to deal with an extended period in which the CFPB lost staff, including Date. Many on Cochran's team were in high demand by law firms and lenders who were seeking to gain insight into the CFPB's processes.

"Everyone knew when they signed onto the regulations team that it wasn't a typical government job. In the process leading up to the final mortgage rules, I don't think anyone took a day off. And Kelly was accommodating to her staff as much as she could be while also prioritizing and getting the job done," says Colgate Selden, who left the CFPB's regulations team in 2013 to join the law firm Alston & Bird. "If you had to look at one person at that agency who's done more work on the rules, it's Kelly. She's a machine. Everything went through her for every rule and she has a good idea of what all the rules did."

Cochran, too, could have moved on after the CFPB finalized its rules. But that was just the start of the agency's work, which is now extending to other parts of the industry. She also had a vested interest in seeing the agency complete its mission under the Dodd-Frank Act, particularly since she was one of the lawyers who helped craft the reform bill. Cochran was a senior policy analyst at the Treasury Department beginning in late 2009 before joining the CFPB in 2011.

"I was able to work on drafting and refining the language [of the Dodd-Frank Act] as it was going through the congressional process. And then seeing those words on the page be transformed into a living, breathing institution and actually having the opportunity to help build that — I feel very fortunate to have been a part of the process," she says.

"The substantive work is in some ways getting more interesting because we're moving now into areas such as looking at payday lending and debt collection."

Some of Cochran's writing and analytical skills likely come from her earlier career as a newspaper reporter. She worked at the News & Observer in Raleigh, N.C., before opting to become a lawyer.

"I found reporting tremendously interesting but it was a situation where I was writing about what other people were doing and debating," she says. "I really wanted to be involved directly in crafting and implementing the solutions, and that wasn't something I could do from a reporting role."

Cochran's interest in consumer financial issues deepened after she returned to her alma mater, the University of North Carolina at Chapel Hill, to pursue a law degree. She did research for the school's Center for Community Capital and worked at one of the country's largest community financial development institutions, the Center for Community Self-Help in Durham. During that time, she also learned about the industry from the regulatory perspective, serving as a law clerk for the summer at the Office of the Comptroller of the Currency.

She later joined the law firm WilmerHale, then went to the Treasury Department in 2009, where she advised the administration on consumer protection issues. She moved to the CFPB when it opened its doors.

"I've always been really interested in issues surrounding economic opportunity," Cochran says. "That's been a common thread throughout my career, from covering education as a reporter, to pursuing a joint degree focused on both law and community and economic development, and to my work today on the role that consumer financial services play in helping families manage their economic lives and build their futures."

The mortgage rules — with their statutory timelines — have taken up much of Cochran's time since the CFPB opened. This is the first year that the agency has been able to focus directly on potential rules for other financial products and services.

Cochran has a long list of proposed rulemaking on the agenda, which she updates on the CFPB's blog every six months. At the forefront of those plans are rules governing debt collection and payday type of loans.

"These are two areas where we are concerned about serious risks to consumers — and in debt collection there's a 40-year-old statute that has never been subject to an implementing regulation, and in payday, federal regulation has really not been a presence," Cochran says.

In areas where the CFPB is looking at new markets or new issues, its first step is research. "A lot of those efforts are building out of extensive research that the bureau is doing to understand the markets and understand the consumer risk," she adds. "That's a new phase for us, and it's really interesting work. We're doing groundbreaking research in a number of different consumer markets right now and it's really amazing to see our knowledge base grow."

The CFPB's rulemaking in debt collection will be among its most significant tasks because it has sweeping powers to reshape the market, including how debt is sold, what information is gathered and reported, and how collectors deal with customers, their payments and complaints. Cochran says the CFPB is in the process of working on a debt collection survey that will aid in the rule-writing process. That's in addition to the more than 23,000 comments the agency received last year when it first put out an advanced notice of proposed rulemaking. The agency expects to take its next rulemaking step in this area in December.

"Debt collection is an interesting area because it's one of the single biggest sources of complaints to the federal government. So there's a huge amount of anecdotal information coming from the complaints, but this survey is a representative, national attempt to get a sense of how consumers are experiencing the debt collection process," Cochran says.

The survey results "will provide a strong basis not only for potential rulemaking but also a range of other Bureau initiatives, and it's really exciting to see that happen."

Lenders complain that the expense of implementing new rules often outweighs the benefit, and Cochran says her team is very sensitive to that issue.

"We know that there's also a cost and uncertainty to new regulations and so that's always something that we think through very carefully because we can't make tweaks up until the last minute. That creates problems for itself," she says. "So there's always this very nuanced fact-specific analysis to how much of this is an issue, what are the implications of going ahead and re-opening this versus not addressing it. And each of those decisions is separate in its own right, but it's something we take seriously."

One recent example of this is when the CFPB proposed earlier this year to broaden its definition of "small creditor" and lenders in "rural" areas, in order to give community banks some regulatory relief from the mortgage rules. Cochran says the agency is using that same level of caution in examining costs for the industry in other rulemaking, such as the new data requirements for the Home Mortgage Disclosure Act, which is expected to be finalized this year.

With HMDA, "we're spending a lot of time thinking about the back-end operation. How we can make the information collection process much less painful for everyone?" Cochran says. "It's not just about what the new requirements look like, but what's the broader context? What guidance can we provide? Where can we clarify? Where can we address friction points? And that's something that we are trying to be very sensitive to as we work through different projects."

Cochran describes rulemaking as "an evolutionary process" and says her team places a heavy emphasis on the data collected and feedback received from outside parties, in terms of whether to proceed with a rule, amend it or disregard it.

"We recognize that good ideas can come from many places, and we really do take the feedback that we receive seriously. And you can see that path of refinement happen in every rulemaking," she says. "That's the point of the rulemaking — to have a very careful, methodical, and transparent process where we get stakeholder views from all sides and think through the implications."

Cochran also acknowledges she and her team don't always get everything right the first time. With the new mortgage disclosure rule, CFPB had to delay the effective date from Aug. 1 to Oct. 3 after realizing it missed a deadline to file paperwork with Congress. It also made numerous tweaks to other rules.

"Where we've found issues that we believe needed to be addressed, we have gone back in and reopened rulemaking," Cochran says. "I think, by and large, we've received positive feedback for that."

Cochran herself has earned positive feedback from her peers, especially considering the CFPB was her first stint writing rules for a regulator.

"She is a very bright, superb writer, and she has great analytical skills," says Leonard Chanin, a counsel in the financial services group at the law firm Morrison & Foerster, and the previous assistant director of regulation at the CFPB. "She's one of best lawyers I've worked with. And I don't say that often."

Financial leaders in Washington also have taken note of Cochran as a manager and her power of the pen.

"One of the features of great leaders is what I call 'paradoxical conservatism,' which is someone who really wants to make a difference and change the world but wants to execute in the most conservative way possible. And Kelly has that," Date says. "It's really hard to find people like that and especially at the peak of her career. We were lucky to have her."

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