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My guess is that it harmonizes federal and state records for identifying individuals.

It harmonizes the schema and process across States. Sharing it with the Federal government is optional since the Federal government doesn’t have the authority to force compliance. Many States opted out of sharing their databases with the Federal government last I checked.

Which states?

Or: How does one even begin looking into this kind of [non] arrangement?

(AFAIK, I'm not necessarily privy to the details of the dealings my state has with the federal government. I'd love to know where to look to see that kind of thing.)

It’s definitely security related. Some states did barely any verification and didn’t have much protection against fake cards.

In Ohio, you could show them a birth certificate and Social Security card and a few minutes later have a freshly printed ID.

If you got your hands on the blank ID cards and a standard commercial card printer, you could make fake IDs all day.

I imagine the more services are provided by an organization, the more that organization has to worry about who is receiving them.

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