Bipartisan House Bill Targets Digital Identity Gaps With State Grants and Anti-Fraud Coordination

A bipartisan House bill would establish a new state grant program and outline a broader federal approach to reducing identity fraud by strengthening online identity verification and what the proposal describes as digital identity infrastructure.

Rep. Bill Foster of Illinois and Rep. Pete Sessions of Texas introduced the proposal, titled the Stop Identity Fraud and Identity Theft Act, positioning it as a response to rising identity theft and fraud risks tied to weaknesses in existing identity systems. The sponsors argue that those weaknesses are increasingly exploited by organized criminal groups and state-backed actors.

A central component of the bill is an identity fraud prevention innovation grant program for states. Under the proposal, grant funding could be used to modernize identity systems and, at a state’s discretion, develop secure digital versions of existing credentials. The bill also frames the program as a way to address emerging threats, including the use of AI-driven deepfakes to defeat remote identity checks.

The sponsors say the legislation would not mandate digital identification or replace physical credentials. Participation would remain voluntary for both states and individuals, and the bill does not require anyone to obtain or use a digital driver’s license or other form of digital identity.

The proposal is tied to ongoing federal standards work. It references efforts already directed by Congress for the National Institute of Standards and Technology to develop voluntary digital identity guidelines. NIST’s recent digital ID guidelines update tightened expectations around biometric verification in higher-assurance scenarios and is widely treated as a baseline by public sector programs and identity providers.

Supporters of the bill also point to the scale of identity fraud and recent breach activity as justification for federal involvement, arguing that many state and local agencies lack the resources to independently deploy stronger identity assurance controls. For the biometrics and identity verification market, targeted grant funding can shape state procurement priorities, including whether programs move toward higher-assurance remote proofing, stronger authentication, or fraud detection capabilities focused on synthetic identities and document-based attacks.

The bill is listed on Congress.gov as H.R. 7270 in the 119th Congress.

Sources: Congressman Bill Foster, Congress.gov

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By the ID Tech Editorial Team