The concept of American banks as the most innovative in the world is difficult to reconcile with the reality that banking in the US is also a highly regulated industry with detailed and focused regulators and whose rules and regulations are constantly changing. While innovation inherently entails a need for freedom to experiment, laws and regulations inherently entail a certain degree of constraint. On the one hand, organizational learning may be defined as the ability of an organization to gain insight and understanding from experience through experimentation, observation, analysis, and a willingness to examine both successes and failures. On the other hand, a common goal of bank regulation is to prevent failures from ever occurring in the first place, and although in recent decades there has been significant deregulation in many industries, a sector that remains heavily regulated is banking. This paper examines the adequacy and applicability of Peter Senge’s theory of a learning organization’s five disciplines to the banking industry, the role of laws and regulations in promoting or discouraging US banks to become learning organizations, and recommendations for steps that US banks may take towards becoming learning organizations.