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And the only reason you get that information is because of federal consumer protection laws. If nothing else, an experienced consumer protection attorney bring

And the only reason you get that information is because of federal consumer protection laws. If nothing else, an experienced consumer protection attorney brings that to the table—knowledge of these various laws (and how you can sue under them) that you might not even know exists.

toolz 4y ago
I think that point is about as fair as saying the only reason it got so complicated in the first place is because of federal consumer protection laws that enable banks/lenders to get away with such complex agreements to begin with. Otherwise you'd have competition that exists solely to correct the complexity of our current financial system.
- thawaya3113 4y ago
  No it isn’t. Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. Consumer protection laws that forced companies to simplify agreements were a response to the massive increase in complexity without such laws being on the books. But there’s an even easier, non historical, way to see how “competition” does nothing to solve the problem of complexity in agreements. The agreements to rent an apartment, or to buy a house, both of which are among the most complicated agreements the majority of people will sign, are far more straightforward in most states than buying a $2 song off iTunes or signing up for a 1 month membership off Spotify. There is a lot of evidence that consumer protection laws have had massive effects in making the agreements more standardized and transparent and reducing shady and fraudulent behavior.
  - thathndude 4y ago
    It's worth noting that a lot of consumer protection laws are 50 years (or less) old. Many were born from the great recession less than 15 years ago. To your point, this is all pretty fresh stuff, and I think there will be more regulations in other areas. The regulations started with housing/mortgage agreements because they are such large transactions. But the same principles will hopefully trickle down.
  - throwaway0a5e 4y ago
    >Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. And we also had centuries of really simple (by 2022 standards) contract terms. Even if you just include the time after mass-literacy contracts didn't start adding tons of length until fairly recently. I'm not sure when exactly the proliferation of additional clauses in otherwise pretty simple contracts started but I read a homeowner's insurance policy from the 1930s and it fit on one page. Edit: Why is this opinion so unwelcome here?
    - mbreese 4y ago
      > policy from the 1930s and it fit on one page Of course it did. If it was printed, at the time, it had to be standardized. So the simplest thing would be to make them all identical. At most you’d have a kind of “if this box is checked, clause A applies” set of customization. Only major contracts would be subject to major customization with individual pages typed. This tool that we love so much probably had a major reason why things got so complicated. Personal theory (that I just thought up, so I’m sure someone else thought of it first): complexity is like a goldfish. It grows to take up all available space in a system. If a system can handle more complexity, more will always appear. When we couldn’t adjust contracts for individuals because it was technologically not feasible, we didn’t and contracts were simple. Now that we can adapt things for each individual contract, or personalize each web page, insert targeted ads, etc… we do because we can.
      - toolz 4y ago
        That's a fair theory, but I would argue lenders like better.com are winning so much business is because they simplify the process. Their marketing is around that exact reason, as well. There's obviously competition in the space of making home purchasing less complicated, which leads me to reasonably believe less consumer protection from disconnected bureaucrats would result in less absurd complexity. I bought a house just a few months ago and I was on the hook for thousands of dollars before I was legally required to take a home purchasing educational course. Only bureaucrats could think up such silly rules as to require people to take educational courses on buying a house and allow those courses to only be legally required after you've committed thousands of dollars to the seller. If the market demanded educational material on how to buy a house (and it does, I've bought a book on real estate for that very purpose before buying my first home) then you get incentives that make sense.
- sharemywin 4y ago
  That's just not how the market worked out during the sub-prime mortgage market. 5% prepayment penalties, Arms with massive rate hikes, neg Amortization loans that ate up your equity. no document loans, no income/asset loans. shopping appraisers to get the most inflated loan amount. all kinds of bull shit fees and higher interest rates for more bullshit compensation. The documents were not any smaller. Most of those documents are there to either make it easier for the lender or protect them in some way. Most people don't have phds in finance, legal, psychology to compete with the army of lawyers, accounts, quants, sales people, marketing people that all work day and night to take your money in the most favorable terms for them possible. Not to mention the boom and bust cycle that imploded the market in the first place. In the end we'd probably end up with some kind of marketplace similar to the app store with 30% fees.
- mindslight 4y ago
  The problem is the courts letting banks/lenders get away with such complex legal agreements. We're straightforwardly bumping against computational complexity, but the legal system continues to ignore this. A reasonable alternative decision would be that a 90 page document is simply not understandable by the common person ("equal protection under the law"), and therefore is not part of / evidence of a binding contract. The disclosure laws actually help the banks here, by putting the most important terms front and center where it can be argued that the borrower did understand those even if they couldn't understand the rest of the document. In fact many legal documents are structured in such a way, putting the big picture at the top and then defining/clarifying things later. As far as your general point, what helps is printed materials by the state that lay out general legal advice. For example, take a look at the wonderful California Tenants Guide. Another thing that would help would be a public standardization of common consumer contracts. There is no need for every lease/employment contract to have its own custom verbiage that a tenant/employee is purportedly responsible for understanding. There should be at most a handful of standard contracts for common relationships, drafted and published by the government. There are already some of these things published by industry groups like landlord's associations, although they can be a bit biased towards their members. Not using a standard contract or lengthy typeset additions should be judged as an a priori attempt to mislead that no amount of initialing will undo. Furthermore, putting terms in a contract that are blatantly contrary to prevailing law should itself be illegal with its own penalties apart from enforcement of the contract. Of course the paperwork pushing lobby isn't a fan of such reforms, and will lobby against them by framing such things as "big government" even though they're better described as mitigations of "big government". There is lots of money to be made by perpetuating government dysfunction and then providing a half-solution. See also: Intuit vs tax filing reform.
  - toolz 4y ago
    > take a look at the wonderful California Tenants Guide. I've never once heard people from California praising their state for making renting better. I've heard the exact opposite many times over. Everything has tradeoffs. Every complexity the state forces into a transaction enables an exploitative company to leverage loopholes to their advantage. Only near perfect systems can reap the benefits of authoritative protections without inadvertently propping up exploiters who thrive on working around the complexity. Something a smaller, (likely more honest) company can't afford to do. There's a reason so many gigantic companies lobby for more regulation in their industry and I sincerely doubt that reason is to protect the consumer.
- DarylZero 4y ago
  Competition will fix asymmetric information? That's _not_ how the theory goes.
- Sohcahtoa82 4y ago
  Agreements are written in complex language to make sure everything is as explicit as possible and that there are no loopholes or anything subject to interpretation. I've always argued that if the Bill of Rights was written today, each Amendment would be 50 pages long. > Otherwise you'd have competition that exists solely to correct the complexity of our current financial system. There's nothing stopping a company from doing this now. Consumer protection laws merely establish a baseline minimum. The market is still free to do better than the minimum.

toolz 4y ago

I think that point is about as fair as saying the only reason it got so complicated in the first place is because of federal consumer protection laws that enable banks/lenders to get away with such complex agreements to begin with. Otherwise you'd have competition that exists solely to correct the complexity of our current financial system.

thawaya3113 4y ago
No it isn’t. Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. Consumer protection laws that forced companies to simplify agreements were a response to the massive increase in complexity without such laws being on the books. But there’s an even easier, non historical, way to see how “competition” does nothing to solve the problem of complexity in agreements. The agreements to rent an apartment, or to buy a house, both of which are among the most complicated agreements the majority of people will sign, are far more straightforward in most states than buying a $2 song off iTunes or signing up for a 1 month membership off Spotify. There is a lot of evidence that consumer protection laws have had massive effects in making the agreements more standardized and transparent and reducing shady and fraudulent behavior.
- thathndude 4y ago
  It's worth noting that a lot of consumer protection laws are 50 years (or less) old. Many were born from the great recession less than 15 years ago. To your point, this is all pretty fresh stuff, and I think there will be more regulations in other areas. The regulations started with housing/mortgage agreements because they are such large transactions. But the same principles will hopefully trickle down.
- throwaway0a5e 4y ago
  >Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. And we also had centuries of really simple (by 2022 standards) contract terms. Even if you just include the time after mass-literacy contracts didn't start adding tons of length until fairly recently. I'm not sure when exactly the proliferation of additional clauses in otherwise pretty simple contracts started but I read a homeowner's insurance policy from the 1930s and it fit on one page. Edit: Why is this opinion so unwelcome here?
  - mbreese 4y ago
    > policy from the 1930s and it fit on one page Of course it did. If it was printed, at the time, it had to be standardized. So the simplest thing would be to make them all identical. At most you’d have a kind of “if this box is checked, clause A applies” set of customization. Only major contracts would be subject to major customization with individual pages typed. This tool that we love so much probably had a major reason why things got so complicated. Personal theory (that I just thought up, so I’m sure someone else thought of it first): complexity is like a goldfish. It grows to take up all available space in a system. If a system can handle more complexity, more will always appear. When we couldn’t adjust contracts for individuals because it was technologically not feasible, we didn’t and contracts were simple. Now that we can adapt things for each individual contract, or personalize each web page, insert targeted ads, etc… we do because we can.
    - toolz 4y ago
      That's a fair theory, but I would argue lenders like better.com are winning so much business is because they simplify the process. Their marketing is around that exact reason, as well. There's obviously competition in the space of making home purchasing less complicated, which leads me to reasonably believe less consumer protection from disconnected bureaucrats would result in less absurd complexity. I bought a house just a few months ago and I was on the hook for thousands of dollars before I was legally required to take a home purchasing educational course. Only bureaucrats could think up such silly rules as to require people to take educational courses on buying a house and allow those courses to only be legally required after you've committed thousands of dollars to the seller. If the market demanded educational material on how to buy a house (and it does, I've bought a book on real estate for that very purpose before buying my first home) then you get incentives that make sense.
sharemywin 4y ago
That's just not how the market worked out during the sub-prime mortgage market. 5% prepayment penalties, Arms with massive rate hikes, neg Amortization loans that ate up your equity. no document loans, no income/asset loans. shopping appraisers to get the most inflated loan amount. all kinds of bull shit fees and higher interest rates for more bullshit compensation. The documents were not any smaller. Most of those documents are there to either make it easier for the lender or protect them in some way. Most people don't have phds in finance, legal, psychology to compete with the army of lawyers, accounts, quants, sales people, marketing people that all work day and night to take your money in the most favorable terms for them possible. Not to mention the boom and bust cycle that imploded the market in the first place. In the end we'd probably end up with some kind of marketplace similar to the app store with 30% fees.
mindslight 4y ago
The problem is the courts letting banks/lenders get away with such complex legal agreements. We're straightforwardly bumping against computational complexity, but the legal system continues to ignore this. A reasonable alternative decision would be that a 90 page document is simply not understandable by the common person ("equal protection under the law"), and therefore is not part of / evidence of a binding contract. The disclosure laws actually help the banks here, by putting the most important terms front and center where it can be argued that the borrower did understand those even if they couldn't understand the rest of the document. In fact many legal documents are structured in such a way, putting the big picture at the top and then defining/clarifying things later. As far as your general point, what helps is printed materials by the state that lay out general legal advice. For example, take a look at the wonderful California Tenants Guide. Another thing that would help would be a public standardization of common consumer contracts. There is no need for every lease/employment contract to have its own custom verbiage that a tenant/employee is purportedly responsible for understanding. There should be at most a handful of standard contracts for common relationships, drafted and published by the government. There are already some of these things published by industry groups like landlord's associations, although they can be a bit biased towards their members. Not using a standard contract or lengthy typeset additions should be judged as an a priori attempt to mislead that no amount of initialing will undo. Furthermore, putting terms in a contract that are blatantly contrary to prevailing law should itself be illegal with its own penalties apart from enforcement of the contract. Of course the paperwork pushing lobby isn't a fan of such reforms, and will lobby against them by framing such things as "big government" even though they're better described as mitigations of "big government". There is lots of money to be made by perpetuating government dysfunction and then providing a half-solution. See also: Intuit vs tax filing reform.
- toolz 4y ago
  > take a look at the wonderful California Tenants Guide. I've never once heard people from California praising their state for making renting better. I've heard the exact opposite many times over. Everything has tradeoffs. Every complexity the state forces into a transaction enables an exploitative company to leverage loopholes to their advantage. Only near perfect systems can reap the benefits of authoritative protections without inadvertently propping up exploiters who thrive on working around the complexity. Something a smaller, (likely more honest) company can't afford to do. There's a reason so many gigantic companies lobby for more regulation in their industry and I sincerely doubt that reason is to protect the consumer.
DarylZero 4y ago
Competition will fix asymmetric information? That's _not_ how the theory goes.
Sohcahtoa82 4y ago
Agreements are written in complex language to make sure everything is as explicit as possible and that there are no loopholes or anything subject to interpretation. I've always argued that if the Bill of Rights was written today, each Amendment would be 50 pages long. > Otherwise you'd have competition that exists solely to correct the complexity of our current financial system. There's nothing stopping a company from doing this now. Consumer protection laws merely establish a baseline minimum. The market is still free to do better than the minimum.