(Reuters) -A federal judge in Texas rejected on Friday a request by the Consumer Financial Protection Bureau to lift an order that has blocked a new U.S. regulation capping credit card late fees at $8, a policy challenged by business and banking groups.

U.S. District Judge Mark Pittman in Fort Worth declined to dissolve an injunction he issued in May that barred the rule - part of Democratic President Joe Biden's administration's broader crackdown on "junk fees" - from taking effect.

The regulation would block card issuers with more than one million open accounts from charging more than $8 for late fees unless they can prove higher fees are necessary to cover their costs.

In asking the judge to revisit the injunction, the CFPB said the action had rested entirely on an appeals court's ruling declaring the agency's funding structure unconstitutional - a decision subsequently overturned by the U.S. Supreme Court.

But Pittman agreed with groups including the U.S. Chamber of Commerce and the American Bankers Association that had sued to challenge the regulation that the rule could still be blocked on other grounds.

Pittman, who was appointed by Republican President-elect Donald Trump during his first term, said the rule violated the Credit Card Accountability and Disclosure Act, a 2009 U.S. law designed to protect consumers from unfair practices by card issuers.

The law regulated excessive fees but allowed card issuers to impose "penalty" fees when a customer violated a credit card agreement, including by failing to make an on-time payment, Pittman said.

"Congress assigned the CFPB as an umpire to call balls and strikes on the reasonableness and proportionality of penalty fees," Pittman said, using a baseball analogy.

But by preventing card issuers from actually imposing penalty fees, the CFPB impermissibly "established a strike-zone only large enough for pitches right down the middle," Pittman wrote.

The judge also rejected the CFPB's latest request to transfer the case out of Texas to Washington.

A CFPB spokesperson said the judge's ruling "allows big banks to extract $27 million in excessive late fees from American families every single day."

The agency estimates that without the rule, people will spend more than $56 billion on credit card fees over the next five years.

The Chamber had no immediate comment.