HR7270-119

What This Bill Does

The Stop Identity Fraud and Identity Theft Act responds to identity theft, data breaches, fraud in federal benefits, suspicious financial transactions tied to identity compromise, and AI-enabled deepfake attacks. It directs the Treasury Secretary to establish State grants within one year. States may use grant funds to develop digital driver licenses and other identity credentials that comply with NIST identity-validation guidance, improve privacy and security, harden legacy identity systems, protect Treasury-paid benefit programs, protect the financial system, and enable trusted online transactions. At least 10 percent of each State grant must help individuals obtain required credentials or identity-verification services. The bill bars grant funds from mandating digital ID use, eliminating physical licenses, or issuing licenses or identity credentials to unauthorized immigrants.

Who Benefits and How

State motor vehicle and identity agencies benefit from federal funding to modernize credential systems that otherwise may take years to update. Consumers and online users benefit if credentials make it easier to prove identity online without relying on weaker legacy systems. Banks, payment platforms, benefit administrators, and other fraud-exposed organizations benefit from more reliable identity proofing that can reduce account takeover, synthetic identity fraud, deepfake-enabled fraud, and abuse of Treasury-paid programs. Individuals who lack required documents benefit from the 10 percent set-aside for credential-assistance services.

Who Bears the Burden and How

Treasury must design and administer a new grant program, evaluate State uses, and enforce grant restrictions. State identity agencies must build or procure NIST-aligned digital credentials, protect privacy and security, provide services for individuals who need credential help, and keep physical credential systems available. Unauthorized immigrants are excluded from grant-funded credential issuance. States cannot use the funds to require anyone to adopt a digital ID, so agencies must maintain parallel physical and voluntary digital options.

Key Provisions

• Requires Treasury to establish identity fraud prevention innovation grants for States within one year.
• Funds State digital driver licenses and identity credentials that comply with NIST identity and attribute validation guidance.
• Requires at least 10 percent of each State grant to help individuals obtain needed credentials or identity-verification services.
• Bars grant funds from mandating digital ID use, eliminating physical credentials, or issuing credentials to unauthorized immigrants.