Changing Up a Gear: REAL ID Act Prompts U.S. States to Modernize Driver's Licenses

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By Sam Gazeley | 4Q 2019 | IN-5637

After passing through Congress in 2005, the REAL ID Act has had a significant impact on the government ID market in the US. Starting October 1, 2020, air travel within the United States will only be permissible for citizens carrying a REAL ID driver’s license (or another form of accepted identification), sometimes denoted by a star on the top right of the card. As ownership of a card is mandatory to pass through the airport gate, U.S. officials are becoming increasingly concerned that, less than a year from the deadline, a significant number of U.S. citizens will not have such a credential by then.

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REAL ID and What It Means

NEWS


After passing through Congress in 2005, the REAL ID Act has had a significant impact on the government ID market in the US. Starting October 1, 2020, air travel within the United States will only be permissible for citizens carrying a REAL ID driver’s license (or another form of accepted identification), sometimes denoted by a star on the top right of the card. As ownership of a card is mandatory to pass through the airport gate, U.S. officials are becoming increasingly concerned that, less than a year from the deadline, a significant number of U.S. citizens will not have such a credential by then.

  Sample REAL ID  

The primary goal of the introduction of the REAL ID Act was to tackle issues made apparent by the 9/11 Commission, which identified that illegitimate drivers’ licenses were too readily attainable, and therefore gave the new credentials new requirements:

      I.        One document that shows a citizen’s full legal name, such as a certified birth certificate copy or U.S. passport.

     II.        One document that proves their social security number.

   III.        Two different documents that show their address, such as a utility bill.

   IV.        One document with proof of written signature.

A recent study conducted for the U.S. Travel Association has suggested that approximately 75% of U.S. citizens do not believe they possess a REAL ID driver’s license and 57% are unaware of the impending enforcement of the law, resulting in a forecasted US$40 million loss in travel spending. Not only will the implications be apparent as it relates to air travel, but REAL ID will also be required to enter most federal buildings and military bases. As such, the U.S. driver’s license market is seeing considerable movement as states attempt to rapidly issue the new licenses before the deadline.

Pressure across the United States

IMPACT


One state that finds itself in the process of issuing REAL ID drivers licenses is Illinois, which has issued 300,000 REAL ID licenses to date and is pushing citizens to apply for the updated document. The increased number of documents required to obtain the license will make the application process longer, slowing the number of applications received and inhibiting the number of licenses able to be issued, yet Illinois is still making progress in getting the document to citizens who require it.

On the other hand, there are states that are not as advanced in their REAL ID issuance and could face significant pressure as it gets closer to the deadline. Both Oregon and Oklahoma are planning to begin REAL ID issuance in the summer of 2020, just a few months before the law enters enforcement, while Kentucky has announced it is postponing its intention to issue REAL ID indefinitely, citing an overwhelming burden on administrative capabilities.

It is important to remember that citizens already possessing an alternative form of acceptable ID, such as a U.S. passport, will not be affected by these legislative changes and so are unlikely to request a REAL ID. Furthermore, passports and driver’s licenses are not compulsory credentials and, for citizens who have no need to travel by air between states, there is little need to spend an additional US$30 on an unnecessary credential.

Fragmentation in the U.S. Driver's Market

RECOMMENDATIONS


The driver’s license market in the United States is already fragmented by a number of vertices, including security standards, material, and compliance with the REAL ID Act. The issue arises from a state-level directive of how secure the driver’s licenses will be and what will be required of them, against the number likely to be issued. For example, in terms of materials, it is up to the states to determine what substrate is to be used for the document, whether it be Polyvinyl Chloride (PVC), Teslin, Polycarbonate, or a composite.

  EMV Card Shipments by Type  

As can be seen in Table 1, shipments of driver’s licenses in the United States, both smart and legacy, are set to rise from 42.6 million in 2018 to a forecasted 47.5 million in 2024. This, as well as natural growth derived from rising population, are anticipated as citizens request the REAL ID licenses. Many states that oversee the issuing and processing stages of their own driver’s licenses have been slow to adapt to the increased volumes as a result of the REAL ID Act. This has been compounded by miscommunication with the federal government and technological issues as part of the processing stage and has led to a number of states issuing both older versions of the driver’s license and the REAL ID updated format, without communicating the difference to citizens. This means that a portion of citizens will request replacement licenses that are not compliant with the REAL ID Act and will cause inconveniences and delays at air terminals. Similarly, some REAL ID licenses will be identifiable by the gold star printed at the top right, whereas some will not feature a star at all.

To add to the confusion, there also exists the option of an Enhanced ID, a REAL ID-compliant credential that can be used not only for interstate air travel, but also for road and sea travel to Canada, Mexico, and a number of Caribbean countries. It is important to distinguish, however, that these Enhanced IDs are only available to American citizens, whereas people of lawful presence in the U.S. can only obtain a REAL ID.

Overall, the migration process to REAL ID licenses has been good, with significant progress having been made by the majority of states. The Department of Homeland Security (the federal department tasked with implementing the REAL ID Act) has acknowledged that 47 states are currently issuing their REAL ID licenses, an increase from the 26 in January 2017.

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