In a decisive step to prioritize safety and compliance with federal law, the U.S. Small Business Administration announced on June 7 the relocation of its Los Angeles regional office due to the city’s refusal to cooperate with Immigration and Customs Enforcement. Coupled with the House passage of H.R. 2931, the Save SBA from Sanctuary Cities Act, on June 5, 2025, this decision marks a commendable effort to protect American small businesses and restore the rule of law amid escalating nationwide illegal immigrant riots.

Last month, thousands of rioters surrounded the Roybal Federal Building, assaulting ICE officers, looting stores, and defacing public property with slogans threatening ICE personnel. City officials reported that over 20 businesses were looted in downtown Los Angeles alone, causing millions of dollars in property damage. According to a report by the city budget chief, the riots will cost Los Angeles taxpayers $32 million. 

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California Gov. Gavin Newsom and Los Angeles city officials, including Mayor Karen Bass, have yet to fully condemn this disorder. This is not surprising, as they have actively undermined federal immigration enforcement efforts through their steadfast support of sanctuary policies, which shield illegal aliens and undermine public safety.  

Citing the city’s refusal to cooperate with ICE and failure to ensure public safety, the SBA has decided to leave Los Angeles. SBA Administrator Kelly Loeffler declared: “If a city won’t protect its people, we won’t stay.” 

The SBA’s decision to relocate its regional office in Los Angeles follows the Trump administration’s broader crackdown on sanctuary jurisdictions that began with an executive order in January and has expanded since. This was the catalyst for the SBA’s earlier decision in March 2025 to relocate offices from New York City, Chicago, Atlanta, Boston, Denver, and Seattle, all sanctuary cities that have experienced violent anti-ICE protests in recent weeks. 

Administrator Loeffler is also implementing broader reforms aligned with President Donald Trump’s Executive Order 14218, which prohibits the use of federal resources to subsidize sanctuary jurisdictions. Already, the SBA has moved to require citizenship verification on all business loan applications. Under the Biden administration, ineligible applicants were frequently distributed SBA loans, including a $783,000 loan approved for a business co-owned by an illegal immigrant. 

These efforts ensure taxpayer-funded programs only benefit legal residents, and that’s good policy. Taxpayers shouldn’t foot the bill for sanctuary cities’ failed open-border experiments. Administrator Loeffler’s reasoning is straightforward. The SBA can no longer remain in a jurisdiction that is “siding with illegal aliens over American citizens,” says Loeffler. The agency is doing more than following federal law by relocating its offices. It’s upholding public safety, protecting its employees, and standing with American business owners who deserve security and accountability from their local governments. 

The House of Representatives took an important step by passing the Save SBA from Sanctuary Cities Act, which codifies the SBA’s decision to move its regional, district, and local offices out of jurisdictions that actively obstruct federal immigration enforcement. The bill defines a “sanctuary jurisdiction” as any state or locality that restricts cooperation with federal immigration authorities. That includes refusing to provide information about immigration status or failing to honor detainers issued by the Department of Homeland Security. 

In the wake of violent riots fueled by defiant sanctuary city policymakers, the case for this legislation is stronger than ever. 

While the bill passed mostly along party lines, its bipartisan support is significant. Eight Democrats voted for the legislation, signaling that support for law and order doesn’t need to be a partisan issue. 

Predictably, opponents of the bill have claimed it “wastes taxpayer dollars” and causes “disruption.” These claims fail to recognize that taxpayer dollars are wasted when federal buildings are vandalized, SBA personnel fear for their safety, and agencies are forced to operate in jurisdictions that defy federal mandates. The real disruption is the disorder caused by sanctuary policies that shelter lawbreakers and fuel politically motivated violence.

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The SBA is a lifeline to American entrepreneurs who operate in high-risk communities and depend on lawful governance to keep their businesses from closing. It’s not unreasonable to ask that the agency offices meant to serve these entrepreneurs operate in cities that respect federal law and prioritize public safety. Small businesses need, and deserve, more than sanctuary cities offer. 

In the face of sanctuary city chaos, the SBA chooses safety and government accountability. That’s policy worth defending and leadership worth applauding. The Save SBA from Sanctuary Cities Act could give this sensible move by the SBA staying power, ensuring that American businesses are prioritized and protected.

Jacob Sagert is a senior policy analyst for American Freedom at the America First Policy Institute.