Stephanie Shea is a Shareholder in the Firm’s Orange County office and a member of the Commercial Finance practice group. Ms. Shea specializes in compliance with federal and California consumer finance laws and regulations, fair lending statutes and the flood insurance regulations. Her principal practice is advising community banks, credit unions, savings associations, and other lenders on complying with the various consumer finance laws and regulations throughout the entire credit process – from marketing to servicing.  She can advise on all consumer credit products, including auto loans, credit cards, HELOCs, mortgage loan.  She is a lending subject matter expert in ECOA, FCRA, MLA, RESPA, SCRA, TILA, UDAP/UDAAP and California lending laws, fair lending/banking (such as redlining, citizenship, and immigration status discrimination), and flood insurance regulations, among others.  She has also been advising clients on how to transition their adjustable rate mortgage loans from LIBOR.

In addition to advising clients, Ms. Shea is an exceptional, high-energy public speaker that can break down complex laws into easy-to-understand terms.  As a result, she regularly provides engaging and approachable in-house training (both in-person and virtual).

Prior to Buchalter, Ms. Shea was an attorney at Aldrich & Bonnefin PLC for over 10 years.  Ms. Shea obtained her juris doctor degree from Chapman University School of Law in May 2011, Magna Cum Laude. While at Chapman, she served as Article Editor for Chapman Law Review. Ms. Shea received her bachelor’s degree in Political Science from the University of California, Los Angeles.

Professional Involvement

• Member, State Bar of California
• Member, Orange County Bar Association
• Member, Orange County Women Lawyers Association

Bar Admissions

• California

Credit in General

• Advised numerous lenders launch new credit products (overdraft lines of credit, credit cards, installment loans, home equity lines of credit (HELOCs), mortgages (fixed and variable rate), among others) by reviewing the lenders’:
  • Underwriting standards for compliance with ECOA/Reg B and other fair lending statutes, and for purposes of ability-to-repay rules, as applicable;
  • Marketing materials for compliance with ECOA/Reg B and other fair lending statutes, TILA/Reg Z’s advertising rules, among others;
  • Applications for compliance with ECOA/Reg B and other fair lending statutes, California laws, customer identification procedures, among others;
  • Application disclosures (for example, credit card, adjustable rate mortgage (ARM) and HELOC application disclosures);
  • Loan closing process for compliance with all applicable laws and regulations, including ECOA/Reg B’s adverse action notice and signature rules, and FCRA’s permissible purposes for obtaining a credit report;
  • Account-opening/consummation disclosures for compliance with, as applicable, California laws, the ECOA/Reg B, FCRA, Flood Disaster Protection Act (FDPA), Military Lending Act, RESPA, TILA/Reg Z, among others; and
  • Their servicing practices and disclosures for compliance with laws such as ECOA/Reg B, RESPA, SCRA, and TILA/Reg Z.
• Advised numerous lenders on how to terminate their open-end credit products, such as credit cards, overdraft lines of credit and HELOCs.
• Advised numerous lenders on how to sync their loan servicing software with the terms of the loan documents of loans the lenders purchased.
• Advised several mortgage and auto lenders on offering mortgage products in languages other than English and other outreach efforts to limited English proficiency individuals.

ECOA/Regulation B and Fair Lending

• Updated a treatise on Special Purpose Credit Programs (SPCPs) and have advised several community banks on what is and how to create a SPCP.
• Advised numerous lenders (mostly commercial lenders) on what constitutes adverse action and how to comply with the adverse action rules (such as when the lenders’ actual practices align with their definitions of application and completed application, when a commercial lender must provide a notice of incompleteness and providing compliant notices).
• Advised a handful of lenders on when their prequalification programs constituted “preapproval” programs under ECOA/Reg B.
• Regularly advises commercial lenders on how the CFPB’s new small business rule will impact their small business lending application process, and is taking reservations for training their loan officers.
• Advised clients on when underwriting criteria may lead to a disparate impact.

Fair Banking

• Advised several depository institutions on when their non-credit practices could trigger fair banking concerns under the federal civil rights statute, California Unruh Act and for purposes of UDAP/UDAAP at the federal and state level (such as the CFPB’s UDAAP examination procedures).

FCRA

• Advised a large credit union on which California provisions the FCRA has preempted.
• Advised a plethora of creditors on when they may permissibly obtain a credit report in connection with an application for credit or for loan servicing.
• Advised a multitude of depository institutions on when they may obtain a credit report in connection with an application for a deposit, savings or share account.
• Advised numerous institutions on when they must include and complete the FCRA portions to the adverse action notices.

FDPA/Flood Insurance Regulations

With respect to the FDPA and flood insurance regulations, Ms. Shea has advised a plethora of lenders (mostly commercial lenders) on the following:

• Whether their loan documents triggered contents coverage and, if so, the repercussions of doing so (such as calculating the amount of contents coverage necessary).
• When a mixed-use property is deemed residential or commercial property for purposes of flood insurance.
• How to calculate coverage when a loan is secured by multiple buildings and/or buildings and contents.
• What “overinsuring” and “underinsuring” means and how to fix both scenarios.
• Determining when the creditor must or may accept a borrower’s private flood insurance policy.

HMDA

• Regularly advise institutions on whether they are (or when they will be) subject to HMDA/Reg C.
• With the new Reg B small business lending rule, advising clients on the interplay between HMDA/Reg C and that new rule (as well as CRA).

RESPA/Regulation X

• Advising lenders on what loans are subject to RESPA/Reg X and which rules remain relevant in Regulation X.
• Advised mortgage and HELOC lenders on when a relationship can trigger RESPA Section 8 issues.
• Advised numerous mortgage servicers on which Reg X mortgage servicing rules they must comply with and how to do so.

TILA/Regulation Z

• Advised numerous lenders on:
  • What is a TILA/Reg Z-covered loan (such as when is an investment loan or rental property loan subject to TILA/Reg Z);
  • How to cure TILA violations by taking corrective action, including closing the rescission period. Some of that corrective action involved curing the following TILA violations:
    • Inaccurate balance computation method disclosures;
    • Onboarding loans inconsistently with disclosed terms;
    • Inadvertently treating/disclosing a consumer-purpose loan as a business-purpose loan;
    • Inaccurate itemization of amount financed in auto loan disclosures; and
    • Contradictory/confusing interest rate and repayment provisions.
  • The impact of tolerances when providing voluntary reimbursement or agency-ordered restitution, and when they may freeze and/or terminate a HELOC;
  • Assisted numerous lenders with reviewing their TILA/Reg Z application disclosures (credit cards, ARMs and HELOCs), account-opening/consummation disclosures and servicing disclosures (such as ARM notices and periodic statements); and
  • What loan modifications trigger new disclosures, ability-to-repay, and/or rescission.
• Advised a handful of lenders on how to:
  • Transition their ARMs tied to LIBOR in compliance with Reg Z;
  • Disclose a discounted rate on their ARMs and HELOCs;
  • Structure their mortgage loan originator compensation plans to be compliant with Reg Z’s loan originator compensation rules; and
  • Determine which of their mortgage loan products qualify as Qualified Mortgages under the ability-to-repay rules.
• Assisted a large bank in defending itself against CFPB’s allegations of TILA (mostly TRID) violations.

Training

• Trained countless lenders on compliance with all applicable federal and California laws and regulations, both in-person and virtually, and with a duration of anywhere from one hour to one full day.

• FDIC, FRB & OCC Issue Interagency Guidance on Third-Party Relationships: Risk Management
• Supreme Court’s Remand of FDIC Enforcement Action: Any Larger Impact on Agency Deference?
• Another Bank Settles Citizenship Discrimination Suit
• CFPB’s PACE Loan Proposal Could Impact Other Creditors
• April was a Big Month for the LIBOR Transition: CFPB Revises Reg Z to Address 12-month LIBOR; Agencies Issue Joint Statement on Completing LIBOR Transition