House bill would fund state digital ID upgrades

Small businesses could see stronger identity checks under a House proposal that would finance upgrades to state credential systems, including phone-based forms of IDs people already carry. Each state could decide whether to participate. The Treasury Department would manage the grants. The measure envisions connected state systems instead of a single national identification program.

Reps. Foster and Sessions say America’s lag in digital identity tools leaves consumers, companies and public agencies exposed to impersonation and payment scams. The bill also cites the growing use of deepfakes as a reason for better protections. In a February statement, the lawmakers estimated that identity-linked fraud could cost federal programs up to $521 billion annually.

Adoption is already uneven. Some form of digital identification or mobile licensing is available across 21 states and Puerto Rico, based on TSA information cited by the publication. Phone compatibility differs, while certain states require residents to use a dedicated application. Foster introduced an earlier version in 2020 and has filed later proposals. Sessions joined the latest effort as a co-sponsor this year. Congress’ website lists no matching Senate measure.