(NORTH CAROLINA) — the trump administration on January 8, 2026 threatened to withhold nearly $50 million in federal highway funding from North Carolina, citing a federal audit that alleged the state illegally issued commercial driver’s licenses to immigrants, including those without lawful presence in the United States.
U.S. Transportation Secretary Sean Duffy gave north carolina governor Josh Stein and the N.C. Division of Motor Vehicles (NCDMV) an ultimatum tied to compliance with federal CDL rules and immigration-status verification.
Key statements and official comments
“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. President Trump and I are committed to keeping you and your family safe on our roads,”
— Sean Duffy, January 8, 2026 (U.S. Department of Transportation briefing room release: USDOT briefing room)“The level of noncompliance in North Carolina is egregious. Under Secretary Duffy, we will not hesitate to hold states accountable and protect the American people,”
— FMCSA Administrator Derek D. Barrs, January 8, 2026
Audit findings and scope
- The audit was carried out by the Federal Motor Carrier Safety Administration (FMCSA) and cited by the U.S. Department of Transportation (USDOT).
- USDOT said the audit reviewed a sample of 50 non-domiciled CDLs in North Carolina and found a 54% failure rate.
- The review is part of a nationwide audit launched after a Trump Executive Order on truck driver roadway safety. North Carolina is the ninth state targeted in this effort.
USDOT summarized the audit findings as including:
– Issuing licenses with validity periods exceeding a driver’s lawful presence.
– Granting licenses to ineligible Mexican citizens.
– Failing to verify lawful presence using the federal SAVE system (Systematic Alien Verification for Entitlements).
Information about SAVE is provided by USCIS at USCIS SAVE.
Numbers and potential sanctions
- USDOT said records indicate 924 non-domiciled CDLs remain unexpired in North Carolina.
- The administration identified instances where licenses remained valid years after a driver’s work authorization had expired.
- USDOT said it is prepared to withhold approximately $48.75 million to $50 million in federal highway funds for fiscal year 2027 if the state does not comply.
- North Carolina has 30 days to respond with a plan to identify and revoke all non-compliant licenses.
Possible escalations described by federal officials:
1. Immediate cancellation of CDLs for nearly 1,000 drivers, disrupting livelihoods and the state’s logistics industry.
2. Decertification of North Carolina’s entire CDL program, which would:
– Prohibit the NCDMV from issuing, renewing, or upgrading any commercial licenses for any residents until compliance is met.
Context and related actions in other states
- California has had $160 million withheld as of January 7, 2026.
- Colorado, Texas, and Washington were previously put on notice for similar licensing issues.
- The administration framed the crackdown as a public safety measure tied to truck driver roadway safety, arguing that “lax immigration policies” have allowed unqualified individuals to operate heavy machinery such as fuel tankers and school buses.
Responses and criticisms
- Critics and immigrant advocacy groups, including United Sikhs, argue the policy targets essential labor and could worsen national driver shortages, according to the administration’s summary of the pushback.
- The threatened funding cut adds pressure on state leaders as federal agencies widen their review of how states issue CDLs to non-domiciled drivers and verify lawful presence.
Legal and administrative implications
- The federal audit’s allegations raise legal and administrative questions about state compliance with federal CDL standards and verification procedures.
- The dispute centers on non-domiciled CDLs—commercial licenses issued to drivers who are not domiciled in the state—and the audit’s finding that some licenses were issued or kept valid beyond a driver’s authorized stay.
- USDOT and FMCSA are using audit findings and enforcement tools (withholding highway funds and potential decertification) to press states for compliance.
Where to find more information
- USDOT newsroom: USDOT newsroom
- FMCSA newsroom: FMCSA newsroom
- White House briefing room: White House briefing room
- SAVE program details: USCIS SAVE
Takeaway
The administration’s action places north carolina alongside a growing list of states under federal review. USDOT and FMCSA connect compliance with license issuance and immigration verification to transportation safety and federal funding, and they have signaled they will use funding and certification tools to compel adherence to federal requirements.
The U.S. Department of Transportation is pressuring North Carolina to reform its commercial driver’s license issuance process. Following an audit showing widespread failure to verify immigration status, the federal government threatened to pull $50 million in funding. The state must now identify and revoke licenses issued to ineligible individuals or risk the complete decertification of its commercial driving program, which would impact all state residents.
