Business impacts of the 2021 Digital Identity Act

selfie face matching for KYC/AML

Last updated on November 8th, 2023 at 03:34 pm

H.R.4258, also known as the Improving Digital Identity Act of 2021, is a bill that was introduced in the United States House of Representatives in September 2021. The bill achieved strong support from both Democrats and Republicans due more than $60B in unemployment fraud during the 18-month period beginning in April 2020, as well as COVID-19 and PPP loan fraud perpetrated against businesses and individuals. As many supporters noted, there is no easy, affordable, or reliable way for government agencies or businesses to verify whether individuals are who they purport to be.

The Digital Identity Act aims to establish a grant program for the development and implementation of secure and interoperable digital identity verification systems.

In 2022, this bill was placed on the U.S. Senate legislative calendar with the goals of:

  • Awarding grants to states, local, tribal, and territorial governments to upgrade systems that provide drivers’ licenses or other types of identity credentials to support the development of highly secure, interoperable systems that enable digital identity verification.
  • Submitting to Congress a report on the estimated potential savings, due to the increased adoption and widespread use of digital identification, of (1) the federal government from averted benefit fraud, and (2) the U.S. economy and consumers from averted identity theft.
  • Publishing guidelines for federal and state agencies to consider when implementing digital identity programs

The bill was passed with bipartisan support due to digital identity verification‘s role in cybersecurity and preventing identity theft.

Scaling up Login.gov

A leaked email in February 2023 shared the drafts of an executive order which mulled the scaling up of login.gov, a digital identity service already in place and run by the General Services Administration (GSA).

Login.gov is a secure and user-friendly authentication platform developed by the United States Government to provide a single sign-on solution for users accessing government services and applications. The platform allows users to create a single account that can be used to access a variety of government services, eliminating the need to create and manage multiple accounts for each agency.

Login.gov was developed as part of the US government’s efforts to improve the security and usability of digital services for citizens. It uses modern encryption and security protocols to protect user data and prevent unauthorized access to government systems.

The platform is currently used by a variety of government agencies, including the Department of Veterans Affairs, the Internal Revenue Service, and the Social Security Administration, among others. It is essentially a government-sponsored single-sign on (SSO).

The drafted executive order focused on agencies that offer “high impact” public services by the Office of Management and Budget. These agencies, including the Census, passport renewal, and the IRS (which uses the controversial ID.me technology) would be tasked with developing plans to add Login-dot-gov as a sign-on and identity verification option.

Login.gov currently verifies individuals using their photo ID, in addition to KBA questions based on public records. This service is performed by Experian, best known as a consumer credit agency. Management of official, government identity by private companies has been controversial at best.

“Millions of Americans have had to turn over their biometric information to private companies in order to access essential government services with little clarity on how their information will be safeguarded.”
Outgoing chairwoman of the House Oversight and Reform Committee Rep. Carolyn Maloney (D-N.Y.)