Transportation Secretary Sean Duffy warns the state could lose nearly $50 million in federal funds unless unlawfully issued CDLs are revoked.

Federal transportation officials have concluded that more than half of the commercial trucking licenses issued to foreign nationals in North Carolina were granted illegally, triggering a potential showdown that could cost the state tens of millions of dollars.

According to a Jan. 8 statement from the U.S. Department of Transportation, a federal audit found that 54 percent of non-domiciled commercial driver’s licenses (CDLs) issued by North Carolina failed to meet federal requirements. The review was conducted by the Federal Motor Carrier Safety Administration as part of a nationwide crackdown on unlawful trucking licenses.

Transportation Secretary Sean Duffy said the violations are serious enough that the state could lose nearly $50 million in federal transportation funding if corrective action is not taken immediately.

“North Carolina’s failure to follow the rules isn’t just shameful — it’s dangerous,” Duffy said. “State leadership must immediately remove these dangerous drivers from our roads and clean up their system.”

Expired Status, Ineligible Drivers

Federal investigators found that North Carolina issued non-domiciled CDLs to drivers whose lawful presence in the United States had expired, as well as to individuals who were never eligible to receive such licenses under federal law.

FMCSA officials sent a formal letter to North Carolina transportation leaders, including Gov. Josh Stein, outlining mandatory corrective steps. Those demands include:

An immediate pause on issuing non-domiciled CDLs

Identification and revocation of unexpired but noncompliant licenses

A full internal audit of licensing practices and quality controls

“The level of noncompliance in North Carolina is egregious,” FMCSA Administrator Derek Barrs said. “Under Secretary Duffy, we will not hesitate to hold states accountable and protect the American people.”

State officials did not respond to requests for comment by publication time.

Part of a Broader Federal Crackdown

North Carolina is not alone. The Biden-era licensing practices now under scrutiny have surfaced across multiple states, prompting aggressive federal enforcement.

In California, federal auditors previously found 17,000 trucking licenses issued unlawfully. After the state delayed revoking them amid pressure from activist groups, Duffy announced that $160 million in federal funds would be withheld, citing Gov. Gavin Newsom’s failure to comply.

Similar warnings have been issued to New York and Colorado, where audits also revealed widespread illegal issuance of CDLs to foreign nationals.

Duffy has made clear the policy is non-negotiable.

“Our demands were simple: follow the law, revoke the unlawfully issued licenses, and fix the system so this never happens again,” Duffy said. “Putting illegal immigrants ahead of public safety is unacceptable.”

As federal audits continue nationwide, more states could soon face the same choice: enforce the law—or lose federal funding.