The Government is being accused of engaging in anti-competitive practice towards credit unions.
Concern is being raised about a new rule limiting deposits in credit unions to €100,000.
MEPs passed a report stating that governments should not distort competition in favour of large banks earlier this week.
However Ireland's Marian Harkin believes that the Irish government has done exactly that - with credit union regulation.
"That regulation is distorting competition to the benefit of the large banks, very few people will be investing more than €100,000, but it's the principle that's at stake here because when you put that cap on the amount what is does is it effectively removes credit unions from the mortgage market.
"That is anti-competitive and there is no rationale for it."