NEW YORK, Jan 5 (Reuters) - A U.S. judge on Wednesday narrowed but refused to dismiss a Securities and Exchange Commission lawsuit accusing Morningstar Inc (MORN.O) of letting analysts adjust credit rating models for about $30 billion of mortgage securities, resulting in lower payouts to investors. U.S. District Judge Ronnie Abrams in Manhattan said the SEC plausibly alleged that Morningstar Credit Ratings failed to provide users with a general understanding of its methodology for rating commercial mortgage-backed securities (CMBS), and lacked effective internal controls over its ratings process. The judge also dismissed an SEC claim that Morningstar failed to identify the version of the methodologies used to determine individual credit ratings. Abrams also rejected an SEC request for an injunction, noting that Morningstar Credit Ratings no longer operates as a credit rating agency after its operations were integrated with those of DBRS Inc, under the brand name DBRS Morningstar. Based in Chicago, Morningstar is also known for its investment research, including for mutual funds, and asset management. Morningstar, its lawyers, and the SEC did not immediately respond to requests for comment. Ratings agencies were widely criticized by investors and politicians during and after the 2008 global financial crisis, following a U.S. housing bubble fueled in part by inflated ratings for mortgage securities. In a complaint last February, the SEC said Morningstar violated securities laws by letting analysts make undisclosed adjustments to "key stresses" underlying ratings for 30 CMBS transactions in 2015 and 2016. The SEC said this sometimes benefited issuers that paid for the ratings by lowering the resulting interest rates owed to investors. In May 2020, Morningstar agreed to pay $3.5 million to settle SEC charges it violated conflict of interest rules designed to separate ratings work from sales and marketing. The case is SEC v Morningstar Credit Ratings LLC, U.S. District Court, Southern District of New York, No. 21-01359. Reporting by Jonathan Stempel in New York; Editing by Leslie Adler and Richard Chang