Lawmakers want government to promote use of digital IDs

As a growing number of states embrace the use of mobile driver’s licenses, lawmakers are once again looking to move legislation that would give the government more of a role in the development of digital identity ecosystems. 

The concept of digital IDs is relatively straightforward — individuals would store their verified personal identification documents on their phones or in an app. Supporters of the approach say that it would provide consumers and businesses with more confidence in the veracity of transactions and interactions, particularly for those conducted online.

Despite limited federal action so far in establishing a regulatory standard around the use of digital IDs, there has been a bipartisan push in recent years to promote the adoption of these types of virtual credentials. 

Rep. Bill Foster, D-Ill., has been one of the leading advocates in Congress for enhanced federal participation in digital identity ecosystems. Last month, Foster reintroduced legislation — the Improving Digital Identity Act — that calls for the government to explore the use of “consent-based digital identity solutions” that can enable Americans “to prove who they are online.”

The proposal would create an ‘Improving Digital Identity Task Force’ within the Executive Office of the President to, in part, “improve access and enhance security between physical and digital identity credentials, particularly by promoting the development of digital versions of existing physical identity credentials.”

Foster and Rep. Clay Higgins, R-La., also teamed up in June to introduce legislation that would require the Transportation Security Administration to compile a report for Congress on its use of digital identities and their potential impact on homeland security. The bill passed a House Homeland Security Committee markup on June 12 but has not been voted on in the full House. 

In an interview with Nextgov/FCW, Foster said a federal pivot toward digital IDs would provide an additional authentication layer when it comes to safeguarding virtual transactions and preventing fraud or identity theft. 

He noted that deepfake videos and audio, for instance, have been used by scammers to pilfer funds from unsuspecting victims. While much of the focus has been on developing software that can detect this type of AI-generated content, Foster said the long-term difficulties in successfully using these technologies mean that “the next best thing you can do is provide people with at least the ability to prove they are who they say they are and not a deepfake.”

He added that he’s hoping to get his bill “included in the list of recommended legislative initiatives from the AI Task Force” to address some of these related concerns. House Speaker Mike Johnson, R-La., and Minority Leader Hakeem Jeffries, D-N.Y., announced the launch of the bipartisan group in February to provide policy recommendations around the use of the emerging technologies. 

Foster — who is the ranking member on the House Financial Services Subcommittee on Financial Institutions and Monetary Policy — said “there’s a lot of enthusiasm” from large and small financial institutions for a more streamlined way to fulfill ‘know your customer’ requirements. 

“It's my expectation that as soon as the government defines a standard that works nationwide for authenticating yourself to the different agencies — and potentially the states — that industry will immediately jump on that as a standard that they will accept for things like opening bank accounts,” he added.

A lot of this enthusiasm, Foster said, has to do with fears about identity theft and fraud that were exacerbated by the massive amount of COVID-related aid that was stolen during the pandemic. 

“It was because we did not demand a secure digital ID that we had these tens of billions [of dollars] of COVID identity fraud,” he said. 

Even as the pandemic underscored the importance of verifiable credentials, however, lawmakers’ proposals have remained stalled in Congress.

Foster noted that his bill is a companion proposal to legislation introduced by Sens. Krysten Sinema, D-Ariz., and Cynthia Lummis, R-Wyo., in March 2023. Their bill passed the Senate Homeland Security and Governmental Affairs Committee last July but has not been voted on by the full Senate. 

Although their proposals received bipartisan support in each session of Congress, Foster, Sinema and Lummis have unsuccessfully introduced variations of their bill since 2020.

Despite the stalled legislation, 13 states now offer mobile driver’s licenses and others are moving to adopt the credentials within the next several years. These states have also collaborated with TSA to allow their IDs to be used at airport security checkpoints. 

In a report released on Sept. 23, the Information Technology and Innovation Foundation said that states’ adoption of these virtual credentials could be bolstered by passage of the Improving Digital Identity Act, particularly when it comes to promoting the development of digital IDs.

Ash Johnson, a senior policy manager at ITIF who authored the report, told Nextgov/FCW that Foster’s bill “would be really useful in just kind of streamlining the process and motivating more states to join the mix and ensuring that there's this level of interoperability between states.”

Notably, Foster’s bill prohibits “a single identity credential provided or mandated by the federal government for the purposes of verifying identity or associated attributes.” 

Johnson said this type of approach could mirror the REAL ID rollout and allow for the eventual development “of general guidelines on the most important features” where “the rest is kind of left up to each individual state.”