This thesis addresses the dramatic change in legislation for the operation of foreign banks in the U.S in reaction to more recent myriad of opportunities for foreign banks within the U.S. The author takes on an historical perspective to the nature and concept of foreign banking, the International Banking Act of 1978, the Foreign Bank Supervision Enhancement Act of 1991, and the problems and lessons learned from the Daiwa and BCCI scandals. The author concludes with analysis and comments on current U.S. foreign banking legislation while proposing that U.S. banking regulations on foreign banks, though necessary to protect the U.S. economy, should not stifle innovation and growth.