You can follow the progress of the lawsuit against the Money Transmission Act at http://www.plainsite.org/flashlight/case.html?id=716056.
You can learn more about the companies behind the Money Transmission Act here at http://www.plainsite.org/issues/index.html?id=1.
The unnamed payment processor in this article is Dwolla, which is itself an unlicensed money transmitter in California and most other states. Their connection to a credit union subsidiary does not render them exempt from the law. (Of course, there are thousands of other unlicensed money transmission companies as well, from lawyers to universities to escrow services to payroll processors to real estate agents to construction companies.)
The most expedient way to solve this problem is to contact your state legislators whether you live in California or any other state.
New Hampshire yesterday held a hearing on HB 1700 (http://www.gencourt.state.nh.us/house/committees/housebillsi...), which will repeal New Hampshire's money transmission laws. We should be holding such hearings in every state where money transmission laws exist. They typically cost more to have on the books than they generate in revenue, and they absolutely destroy payments innovation.
Call and e-mail your state legislators! (And if you don't mind, BCC help@facecash.com if and when you do!) The people to e-mail in Silicon Valley are:
Jeremy Dennis - jeremy.dennis@asm.ca.gov (Assemblyman Richard Gordon, Palo Alto)
Brock Winstead - brock.winstead@sen.ca.gov (Senator Joe Simitian, Palo Alto)
Gibran Maciel - gibran.maciel@asm.ca.gov (Assemblyman Jerry Hill, San Mateo)
Eric Dang - eric.dang@asm.ca.gov (Assemblywoman Fiona Ma, San Francisco)
Other people to CC:
Nick Hardeman - nick.hardeman@asm.ca.gov (Principal Assistant, Assemblywoman Fiona Ma, San Francisco)
Bob Twomey - bob.twomey@asm.ca.gov (District Director, Assemblywoman Fiona Ma, San Francisco)
Eileen Newhall - eileen.newhall@sen.ca.gov (Staff Director, California Senate Banking, Finance & Insurance Committee; where the MTA originated)
Mark Farouk - mark.farouk@asm.ca.gov (Legislative Consultant, California General Assembly; had input on the MTA)