H.R. 7270 — Stop Identity Fraud and Identity Theft Act of 2026

This section states 10 congressional findings regarding rising identity theft and fraud—including over 353 million people impacted by 2023 data breaches, $233-$521 billion in estimated annual federal fraud losses, $100-$135 billion in unemployment insurance fraud during the COVID-19 pandemic, and $394 billion in 2023 suspicious transactions tied to identity compromise (covering over 70% of bank Suspicious Activity Reports)—as well as threats from hostile nation-states, organized crime, and AI-powered deepfakes. It declares inadequate current digital identity solutions degrade security and privacy, positions governments (especially states as issuers of driver's licenses) to enhance them alongside NIST guidance, and states as government policy the use of federal authorities to improve digital identity security, reliability, privacy, and convenience.

This section directs the Secretary of the Treasury to establish, not later than one year after the date of enactment, a grant program providing identity fraud prevention innovation grants to states. States must use grants to (1) develop digital versions of driver's licenses and identity credentials compliant with National Institute of Standards and Technology guidelines under the Cybersecurity Enhancement Act of 2014; (2) protect privacy and security, including against artificial intelligence-powered deepfake attacks; (3) develop resilient, interoperable online identity solutions; (4) replace vulnerable legacy identity systems; (5) ensure integrity of Treasury benefit programs; (6) protect the financial system from illicit actors; and (7) enable trusted online transactions. At least 10% of grants to a state must support services assisting individuals in obtaining identity credentials or verification required for state digital driver's licenses or credentials. Grants may not be used to require digital credentials, eliminate physical credentials, or issue credentials to unauthorized immigrants (i.e., non-citizens, non-nationals, and certain non-lawfully present aliens lacking specified statuses). The provision does not require states to develop or issue digital credentials.