I testified before Congress on this issue.

http://www.aarongreenspan.com/writing/20131118.hsgacstatemen...

CFPB comment (mostly the same, some exhibits also) here:

http://www.thinkcomputer.com/20140214.cfpbcomment.pdf

Nothing has changed, and Y Combinator certainly hasn't helped. In fact, they and just about every VC-backed portfolio company have made the situation far worse by convincing legislators that everything is fine. After all, look at the proliferation of innovating startups (who are all breaking multiple federal and state laws so numerous that no one in political office can keep track)!

Also, the article contains an error (really, two) regarding California: the law has been amended so that it is basically moot, and the theoretical surety bond is now $250K, not $500K.