The U.S. Department of Transportation (USDOT) threatened North Carolina with the loss of tens of millions of dollars worth of federal funding over improperly issued non-domiciled commercial driver’s licenses (CDLs).
On January 8, 2026, USDOT announced plans to withhold nearly $50 million in transportation funding from North Carolina if the state does not act quickly to revoke all illegally-issued non-domiciled CDLs.
Officials pointed to an ongoing Federal Motor Carrier Safety Administration (FMCSA) audit that showed that in 54% of sampled cases, North Carolina issued non-domiciled CDLs illegally. Problems uncovered by the audit include:
- Drivers whose licenses were valid long after their lawful presence in the U.S. expired.
- Drivers who were ineligible from holding a non-domiciled commercial CDL.
- Drivers without North Carolina first verifying the individual’s lawful presence in the U.S.
In order to avoid loss of funding, USDOT says that North Carolina must take the following steps:
- Immediately pause issuance of non-domiciled CDLs.
- Identify all unexpired non-domiciled CDLs that fail to comply with FMCSA regulations.
- Revoke and reissue all noncompliant non-domiciled CDLs if they comply with the federal requirements.
- Conduct a comprehensive internal audit to identify all procedural and programming errors, training and quality assurance problems, insufficient policies and practices, and other issues that have resulted in the issuance of non-domiciled CDLs that did not meet Federal rules.
“North Carolina’s failure to follow the rules isn’t just shameful – it’s dangerous. I’m calling on state leadership to immediately remove these dangerous drivers from our roads and clean up their system,” said U.S. Transportation Secretary Sean. P. Duffy. “President Trump and I are committed to keeping you and your family safe on our roads.”
“The level of noncompliance in North Carolina is egregious,” said FMCSA Administrator Derek D. Barrs. “Under Secretary Duffy, we will not hesitate to hold states accountable and protect the American people.”
USDOT has warned several states (including Colorado, New York, Minnesota, and Pennsylvania) that they risk the loss in millions of dollars in funding over improperly issued non-domiciled CDLs.
Earlier this week, USDOT followed through on threatened loss of funding with the state of California over non-domiciled CDL compliance and stripped the state of nearly $160 million.