New York Faces $73M Penalty for Faulty CDL Licensing System

Key Details Transportation Secretary Sean Duffy announced that FMCSA is withholding $73.5 million from New York after the state failed to correct serious flaws in its non-domiciled commercial driver's license program. A federal audit found a 53 percent failure rate, with 107 of 200 sampled licenses issued in violation of federal law. The Core Problem New York's DMV system automatically defaulted to issuing 8-year licenses with non-REAL ID credentials to foreign nationals, ignoring their actual work authorization expiration dates. Drivers with 60-day work permits received licenses valid until 2032. The state also issued licenses based on expired lawful presence documents, allowing drivers without legal status to hold active CDLs. Why It Matters With 32,606 active non-domiciled CDLs in circulation, New York potentially issues more non-domiciled licenses than any state outside California. FMCSA Administrator Derek Barrs called this a systematic and grossly unacceptable deviation from longstanding federal safety regulations - not a misunderstanding of new rules. State Response New York's DMV spokesman denied the allegations, claiming every issued CDL undergoes lawful status verification. However, this contradicts admissions New York officials made to federal auditors, confirming their system was programmed to ignore legal presence documentation. The $73.5 million represents 4 percent of New York's highway transportation funding.