Key takeaway: This bill is still at an early stage. No Senate companion and no committee markup means any real impact on merchant identity verification is years out. Still, the renewed advocacy points to bipartisan appetite for federal support of digital ID infrastructure. It’s worth tracking as a potential long-term lever against both consumer and merchant-side identity fraud.
Reps. Bill Foster (D-IL) and Pete Sessions (R-TX) are renewing their push for a bill that would send Treasury-administered grants to states. The money would help fund digital driver’s licenses and other digital ID systems. Both lawmakers argue that slow U.S. adoption of digital identification is leaving Americans exposed to identity and payment fraud.
The two discussed the bill at a September 22 webinar on digital ID policy, sponsored by the Alliance for Innovative Regulation and Persona Identities. The bill itself isn’t new. Rep. Sessions introduced it as H.R. 7270 back on January 27, 2026, with Foster as cosponsor. It would create voluntary state grant programs, administered by Treasury, to help states modernize identity systems and build secure digital versions of existing credentials, like mobile driver’s licenses. Foster described the approach as “federated” rather than federal, comparing it to models already used across the European Union. Sessions said momentum for the bill may improve after November’s election.
The bill’s backers point to the scale of identity-linked fraud as justification. Federal programs could lose as much as $521 billion a year to fraud, according to the lawmakers’ own February 2026 release citing GAO estimates, which put the range between $233 billion and $521 billion annually. Much of that loss, the release says, ties back to compromised identities. Currently, 21 states and Puerto Rico allow some form of digital ID or mobile driver’s license, per the Transportation Security Administration. Device and app support still varies by state. The bill has no Senate companion, and it hasn’t yet cleared committee markup.
Why it matters: Identity verification sits upstream of a large share of payment and account-opening fraud. A state-level patchwork of digital ID systems makes that verification harder for merchants and financial institutions to rely on. Federal grant funding could help standardize and speed up state adoption over time. That would give merchants a more consistent way to verify who they’re transacting with, especially as deepfake-enabled identity fraud grows more sophisticated.
Source: GovInfo; Payments Dive