New York Loses $73M in Federal Funds Over CDL Violations

Federal agency cites state's failure to revoke illegally issued commercial driver's licenses.

Apr. 17, 2026 at 12:49am

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An abstract, colorful image created through a slow-shutter, panning camera technique, depicting the blurred motion of a semi-truck on a highway, conveying a sense of speed, modern engineering, and the challenges of regulating commercial transportation.The federal government's crackdown on improperly issued commercial driver's licenses in New York exposes broader tensions over public safety and immigration policies on American roads.NYC Today

The U.S. Department of Transportation's Federal Motor Carrier Safety Administration is withholding $73 million in federal funds from New York due to the state's failure to revoke commercial driver's licenses (CDLs) that were illegally issued to non-domiciled individuals. An audit found over 50% of sampled CDL records were issued in violation of federal law.

Why it matters

The loss of federal highway funding puts pressure on New York to address lax oversight of its CDL issuance process, which has allowed unqualified and potentially unsafe drivers onto the roads. This issue has been a concern nationwide, linked to fatal crashes involving commercial vehicles driven by unlicensed or unqualified individuals.

The details

According to the Federal Motor Carrier Safety Administration, New York defaulted to issuing 8-year licenses to foreign drivers for non-REAL ID licenses, regardless of when their legal status expired. The state was ordered in December to begin revoking these illegally issued licenses, but failed to complete the required corrective actions by March. The federal agency says New York's 'continued refusal to fix these failures undermines [its] mission' of ensuring all commercial drivers are properly vetted and qualified.

  • On December 12, 2025, the federal agency ordered New York to begin revoking illegally issued commercial driver's licenses.
  • On March 13, 2026, the federal agency said New York failed to complete the required corrective actions.

The players

Federal Motor Carrier Safety Administration

A division of the U.S. Department of Transportation responsible for regulating the commercial motor vehicle industry, including overseeing the issuance of commercial driver's licenses.

Kathy Hochul

The Democratic governor of New York whose administration is losing $73.5 million in federal highway funds due to the state's failure to revoke illegally issued commercial driver's licenses.

J.F. Schroeder

The commissioner of the New York Department of Motor Vehicles.

Sean Duffy

The U.S. Secretary of Transportation who is withholding the federal funds from New York.

Derek Barrs

The administrator of the Federal Motor Carrier Safety Administration.

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What they’re saying

“FMCSA's mission is safety. That means ensuring that every commercial driver on the road is properly vetted and qualified. New York's continued refusal to fix these failures undermines that mission, and we will not allow federal dollars to support a system that falls short of the law.”

— Derek Barrs, Administrator, Federal Motor Carrier Safety Administration

“I promised the American people I would hold any state leader accountable for failing to keep them safe from unvetted, unqualified foreign drivers. I'm delivering on that promise today by refusing to fund Governor Hochul's dangerous, anti-American policies. My message to New York's far left leadership is clear: families must be prioritized on American roads.”

— Sean Duffy, U.S. Secretary of Transportation

“These charges are a baseless attempt to attack blue states, because as everyone knows New York simply follows federally-issued rules when issuing commercial drivers licenses, something that even the Trump administration has acknowledged.”

— Sean Butler, Spokesperson, Office of Governor Kathy Hochul

What’s next

Litigation could be in the offing, as Hochul's administration has previously challenged the federal government over withheld funding for infrastructure projects.

The takeaway

This case highlights the ongoing tension between states and the federal government over commercial driver's license policies, with safety concerns clashing against claims of overreach. It underscores the need for stronger oversight and coordination to ensure all commercial drivers on American roads are properly vetted and qualified.