H.R. 7270

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7270 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 7270

To establish a government-wide approach to stopping identity fraud and 
theft in the financial services industry, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

January 27, 2026

Mr. Sessions (for himself and Mr. Foster) introduced the following 
bill; which was referred to the Committee on Oversight and Government 
Reform, and in addition to the Committees on Financial Services, and 
Energy and Commerce, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned

_______________________________________________________________________

A BILL

To establish a government-wide approach to stopping identity fraud and 
theft in the financial services industry, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Stop Identity Fraud and Identity 
Theft Act of 2026''.

SEC. 2. FINDINGS.

Congress finds the following:
(1) The lack of an easy, affordable, and reliable way for 
organizations, businesses, and government agencies to identify 
whether an individual is who they claim to be online creates an 
attack vector that leads to millions of Americans being 
victimized by China and North Korea, and other hostile nation-
states, as well as organized crime gangs, all of whom steal and 
compromise identities to commit cybercrime and fraud.
(2) Incidents of identity theft and identity fraud continue 
to rise in the United States, where more than 353 million 
people were impacted by data breaches in 2023.
(3) The Government Accountability Office (GAO) estimated 
that the Federal Government could lose between $233 billion and 
$521 billion annually to fraud; GAO estimated that the amount 
of fraud in unemployment insurance programs during the COVID-19 
pandemic was likely between $100 billion and $135 billion and 
found that the majority of this fraud occurred because 
compromises of identity.
(4) The Financial Crimes Enforcement Network of the 
Department of the Treasury reported that $212 billion worth of 
suspicious financial transactions in 2021 was tied to some form 
of identity compromise; in 2024, they revealed that this number 
had exploded in 2023, covering over 70 percent of all 
Suspicious Activity Reports (SARs) filed by banks, tied to $394 
billion of transactions.
(5) In 2024, the Department of the Treasury report on 
``Managing Artificial Intelligence-Specific Cybersecurity Risks 
in the Financial Services Sector'' flagged the threat of new 
``deepfake'' attacks powered by artificial intelligence and 
noted ``The volume of these types of exploitations or cyber-
enabled attacks is likely to rise as technological developments 
like Generative AI reduce the cost, complexity, and time 
required to leverage gaps in our digital infrastructure.''.
(6) The inadequacy of current digital identity solutions 
degrades security and privacy for all Americans, and as 
``deepfake'' attacks become more prevalent, next generation 
solutions are needed that can protect consumers, businesses, 
and government agencies from identity-related cybercrime.
(7) Government entities, as authoritative issuers of 
identity in the United States, are uniquely positioned to 
deliver critical components that address deficiencies in our 
identity infrastructure and augment private sector identity and 
authentication solutions.
(8) State governments are particularly well suited to play 
a role in enhancing digital identity solutions used by both the 
public and private sectors, given the role of State governments 
as the issuers of driver's licenses and other identity 
documents commonly used today.
(9) The National Institute of Standards and Technology 
(NIST) was directed in the CHIPS and Science Act of 2022 to 
launch new work to develop a framework of common definitions 
and voluntary guidance for digital identity management systems, 
including identity and attribute validation services provided 
by Federal, State, and local governments, and work is underway 
at NIST to create this guidance. However, State and local 
agencies lack resources to implement this new guidance, and if 
this does not change, it will take decades to harden 
deficiencies in identity infrastructure.
(10) It should be the policy of the Government to use the 
authorities and capabilities of the Government to enhance the 
security, reliability, privacy, and convenience of digital 
identity solutions that support and protect transactions 
between individuals, government entities, and businesses, and 
that enable Americans to prove who they are online.

SEC. 3. IDENTITY FRAUD PREVENTION INNOVATION GRANTS.

(a) In General.--The Secretary of the Treasury shall, not later 
than 1 year after the date of the enactment of this section, establish 
a grant program to provide identity fraud prevention innovation grants 
to States.
(b) Use of Amounts.--
(1) In general.--States shall use amounts provided under 
this section to--
(A) develop digital versions of driver's licenses 
and other identity credentials that comply with the 
guidelines for identity and attribute validation 
services developed by the National Institute of 
Standards and Technology under section 504 of the 
Cybersecurity Enhancement Act of 2014;
(B) protect the privacy and security of 
individuals, including guarding against ``deepfake'' 
attacks powered by artificial intelligence;
(C) catalyze the development, deployment, and use 
of more resilient, interoperable solutions Americans 
can use to protect and assert their identity online;
(D) reduce identity theft and fraud by replacing 
legacy identity systems that are highly vulnerable to 
attack from organized criminals and hostile nation-
states with more robust solutions that can defeat these 
attacks;
(E) ensure the integrity of Government benefit 
programs paid through the Department of the Treasury;
(F) protect the United States financial system from 
abuse by illicit actors; and
(G) enable more trusted transactions online.
(2) Requirement.--Not less than 10 percent of any amounts 
provided to a State under this section shall be used by such 
State to provide services designed to assist individuals with 
obtaining any identity credentials or identity verification 
services that are required to obtain a digital driver's license 
or other digital identity credential offered by such State 
physical.
(c) Limitations.--A State may not use any amounts provided under 
this section to--
(1) require a person to obtain or use a digital driver's 
license or digital identity credential;
(2) support any by such State to eliminate the issuance of 
physical driver's licenses and physical identity credentials; 
or
(3) support the issuance of drivers licenses or identity 
credentials to unauthorized immigrants.
(d) Rule of Construction.--Nothing in this section may be construed 
to require any State to develop or issue digital versions of driver's 
licenses or other identity credentials.
(e) Definitions.--In this section:
(1) Secretary.--The term ``Secretary'' means the Secretary 
of the Treasury.
(2) Identity credential.--The term ``identity credential'' 
means a document or other evidence of the identity of an 
individual issued by a State that conveys the identity of the 
individual, including a driver's license, State-issued 
identification card, or birth certificate.
(3) Unauthorized immigrant.--The term ``unauthorized 
immigrant'' means a person who is not--
(A) is not citizen or national of the United 
States;
(B) is not an alien lawfully admitted for permanent 
or temporary residence in the United States;
(C) does not have conditional permanent resident 
status in the United States;
(D) does not have an approved application for 
asylum in the United States; and
(E) did not enter into the United States in 
refugee status.
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