WASHINGTON, D.C., September 1, 2026– The Small Business Administration has issued a final rule terminating its five-decade-old practice of soliciting public notice and comment for regulations governing federal loan, grant, benefit, and contracting programs.
This regulation became effective upon its issuance on August 31 and constitutes a repeal of Section 101.108 of Title 13 of the Code of Federal Regulations. For the past five decades, the Small Business Administration has been using voluntary waiver of regular statutory exemptions under the Administrative Procedure Act, committing itself to giving an opportunity for public comment when making changes to regulations concerning public property, loans, or grants by the government agencies. The repeal of the regulation allows the agency to make adjustments to programs without prior publishing of drafts.
Deregulatory Directives and Administrative Efficiency
Agencies viewed the process of revising the procedures as a necessary modernization that would increase flexibility and remove self-imposed bureaucratic constraints. Released under Executive Order 14219, an order which requires each department of the government to review existing regulations in order to repeal, replace or streamline them, the regulation is expected to save $32,340 annually in administrative costs for the agency and help respond to changes in the market.
This particular regulation was categorized by the agency as an internal procedure change not requiring notice and comment, similar to many recent actions in the executive branch. Voluntary waivers of public participation requirements similar to this one were repealed recently in other agencies, such as the Department of Labor and the Department of Health and Human Services.
Uncertainty Surrounding Core Small Business Programs
In doing away with the required prior notice, the agency acquires the ability to change loan conditions, capital requirements, and set-asides for the purpose of contracting without giving any notice in advance. According to industry lawyers, although the agency still has the power to solicit comments from the public as and when it wishes, small business contractors and participating lenders no longer have the right to assess draft regulations and make their comments before the rules come into force.
This changes the course of operations for commercial banks managing SBA-backed loans and small businesses seeking to obtain government procurement contracts, as there will no longer be the requirement of a prior comment period.
Alternative Avenues for Public Feedback
Although the final rule permits the agency to request comments from the public on a case-by-case and optional basis, stakeholders find themselves in a much more constrained procedural setting in influencing regulation proposals.
Both business firms and advocacy groups will have to depend mostly on centralized control processes like keeping an eye on semi-annual regulatory agendas or requesting stakeholder meetings with the Office of Information and Regulatory Affairs during inter-agency reviews of major regulation proposals. With small businesses and government contractors now having to adjust to the changed procedural system, the absence of guaranteed notice periods makes monitoring of executive action very important.
