Mulvaney, who described the Consumer Financial Protection Bureau (CFPB) as a "sick, sad joke" in a 2014 interview, will serve as acting director until a permanent head is nominated and confirmed, according to a White House statement.
Since the start of his presidency, Trump has decried financial rules and regulations, put in place through the 2010 Dodd-Frank Wall Street reform legislation, to combat the excesses that led to the 2008 financial crisis.
Richard Cordray, the first director of the CFPB who had long been in the banking industry's crosshairs, announced last week he would step down by the end of the month, several months early.
Trump's Treasury Department has produced three reports calling for a whittling down of rules imposed on mid-size banks, a scaling back of stress tests and a restructuring of the CFPB.
Republicans have long deemed the bureau, which was founded in 2011 under the administration of former president Barack Obama, too far outside political control.
Last month, the US Senate voted to terminate a rule created by the agency that would have allowed class-action suits against banks or credit card companies.
The rule would have addressed fine-print clauses that bank and credit card consumers must agree to which bar them from seeking redress through litigation.
The vote was criticised by many Democrats as a sop to Wall Street.