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.
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.
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.
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.
> 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.
> I've never once heard people from California praising their state for making renting better
Let me fix that for you. As a renter in California I had a Landlord who tried to hold on to the bulk of my security deposit (a few thousand dollars) for repainting walls, additional cleaning, etc. The clear guidance in this tenants guide gave me confidence in dealing with the Landlord, clearly articulating my stance, and getting the vast majority of my deposit back. Other Landlords I had were very reasonable and refunded my full deposit without issue (I always left property in a good state) but when I had one that tried to play hardball the guide plus a couple of well written letters with appropriate references to the guide helped me sort out the issue relatively easily.
Making it clear what my rights were and setting clear expectations on tenants and landlords relative responsibilities was a clear benefit to me.
You're rejecting the idea that we can analyze a specific action/edict of government to see if it makes things worse or better. Such a paradigm guarantees that things can only get worse, as the only successful changes will be ones that enrich some well funded interest (ie corruption / regulatory capture).
> Every complexity the state forces into a transaction
I do not see how publishing a guide of public legal advice is adding complexity, regulatory or otherwise, for either party. If you would like to make a specific argument of how it is, please do so.
> I've never once heard people from California praising their state for making renting better. I've heard the exact opposite many times over.
There are incentives to spread the negative/political messages, whereas the gains from repeating helpful individual-empowering advice are diffuse.
I’ve rented in CA as well as other states. CA rental protections were great for getting my landlord to back down from withholding my security deposit for illegal reasons.
> 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.
I can't help but scoff every time I read in a rental contract that even if some part of the contract is nullified due to not being legal, the rest of it still applies. It always makes me wonder which part of it they thought might not be enforceable, although likely they probably all include since it costs them nothing to do so.
A slightly more charitable interpretation would be that they are trying to use a standard contract with terms which are both reasonable and enforceable in most contexts, while allowing for the fact that the rules about precisely what is or is not legal in a contract can vary from one jurisdiction to another and may be subject to a certain amount of interpretation. Also, something which was legal at the time the contract was signed might be changed to be illegal later. Either way, they don't want the entire contract to be nullified on the basis of one invalid term.
IMHO it mostly works out in your favor. If any of your obligations toward them are deemed unenforceable they are still bound to uphold the rest of the contract. The reverse could also apply, of course, but as the smaller and "less sophisticated" party to the contract your obligations are more likely to be nullified by local consumer protection rules than theirs.
Normally I might agree with you, but after dealing with this landlord for six months...I don't think that a charitable interpretation is warranted. I won't bother going into details, but there have been no violations on my part, and I can't say the same for them.
There are good points here, but the equal protection clause has nothing to do with this issue. There are standards in contract law that apply (and are state-specific). Those could be statutorily changed.
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.
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.
>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.
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.
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.
> There's obviously competition in the space of making home purchasing less complicated
How much competition? I've hardly even heard of better.com. Certainly every time I've bought a house (three since 2003, most recently in 2018) I've had to sign an unreadably long contract, and I don't recall much if any advertised competition in the "make it simpler" space.
I'm also not sure I buy that the complexity of the process came down to consumer protection laws, though I'm no expert in that area.
I didn't see a credit score disclosure on better.com's view rates page, but assuming the best score level if you go to bankrate.com and look at the scenario 500K 20% down 740+ credit it shows almost a $50K+ difference over the life of the loan between their quote and the lowest quote on bankrate. Not that they're the best place to find quotes, just it's easy to see multiple rates.
I wouldn't be so sure about that, they've had 3 rounds of layoffs in the past 4 months, one of which was 1/3 of their workforce[0]. They are also accused multiple times of stiffing employees on severance pay[1]. Not to discount everything else you've said, but please don't use that company as an example of winning.
[0] via layoffs.fyi, filter companies to "Better.com"
> I would argue lenders like better.com are winning so much business is because they simplify the process.
I feel like if somebody picks a lender and gets sent a stack of paperwork, they're committed. They're not going to back out "because the paperwork is too complicated" and choose a competitor, and ask their sales people "How long is your paperwork?"
So I'd be skeptical that "complexity of the legal agreement" is at all a factor.
The difference between now and then was a bunch of lawsuits that added more terms to the contract so it was "clearer" and people couldn't win a lawsuit because it wasn't in the contract.
We still can't adjust contracts for individuals because organizations are afraid that they'll wind up in court because "if what I wanted was stupid why did you let me buy it?"
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.
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.