A provision in Senate Bill 2438 that would have allowed the Federal Housing Administration to charge a 4 bp administrative fee has been formally dropped from the Transportation, Housing and Urban Development and Related Agencies Appropriations Act.

The provision contained in the Senate bill would have assessed the fee on lenders, costing $40 for every $100,000 borrowed.

The U.S. Department of Housing and Urban Development had been negotiating to get the proposed hike into the House version of the spending bill, but after the alarm was raised by the Community Mortgage Lenders Association and others it was dropped, HousingWire has confirmed.

“[CMLA] is pleased to have succeeded in blocking additional costs for borrowers seeking FHA-insured mortgages next year and the lenders who will originate those loans. Mid-sized and small community-based lenders help many consumers, particularly first-time buyers, to realize their homeownership aspirations with FHA-insured mortgages,” said CMLA Chair Paulina McGrath said. “The last thing that those consumers, and the lenders who serve them, needed were additional fees that increased the cost of their home loans. We are proud to have taken a principled stand opposing these fees, for the benefit of consumers and the mid-sized and small lenders who serve their financing needs.”

CMLA actively opposed the fee, while other trade associations raised serious concerns about the proposed fees.

“Notably, CMLA was the only association that actively opposed this fee,” said  Glen Corso, executive director for CMLA. “CMLA’s effort was aligned with our mission to exclusively represent small and mid-sized independent and community based lenders.

In a letter to Senate and House appropriators, the Mortgage Bankers Association and a coalition of other trade associations raised concerns about the scope and limits of the fee, and the fact that procedurally, while S. 2438 was approved by the Senate Appropriations Committee, it was never considered by the full Senate.

The CMLA flat-out opposed the fee.

The administrative support fee would have generated an estimated $30 million annually.