(Reuters) -President Donald Trump's administration on Monday asked a federal court to throw out a regulation capping credit card late fees at $8, saying it agreed with business and banking groups that alleged in a lawsuit that the rule was illegal. 

The filing in federal court in Texas by the U.S. Consumer Financial Protection Bureau and business groups that brought the case asked U.S. District Judge Mark Pittman in Fort Worth to enter a final order terminating the late fee rule.

Pittman had previously blocked the CFPB from implementing the rule, which was part of Democratic President Joe Biden's broader crackdown on "junk fees," though Trump's Republican administration could have defended the rule on appeal. 

Representatives of the CFPB and the U.S. Chamber of Commerce, which led the lawsuit, did not immediately respond to emails seeking comment. 

Trump has sought to dismantle the CFPB but has been partially blocked in court. A federal appeals court on Friday said the administration could lay off workers at the agency but not eliminate it entirely. 

The CFPB, a consumer finance watchdog established in the aftermath of the global financial crisis, has long been targeted by Republicans who say it is unaccountable and exceeds its legal authority with enforcement cases against financial companies. 

The agency's late fee regulation would have blocked card issuers with more than 1 million open accounts from charging more than $8 for late fees unless they could prove higher fees are necessary to cover their costs.

Pittman, appointed by Trump during his first term, said in December that 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.

(Reporting by Jack Queen in New York; Editing by Leslie Adler)