Most major banks in the United States are able to perform currency conversions between dollars and Iraqi dinar. Some of the banks that offer this service include Wells Fargo and Bank of America.
Banks exchange money based on the current exchange rate between the currencies. Exchange rates are updated frequently and usually change from day to day. Banks generally have access to the most current exchange rate and use it to determine how much currency can be bought with a given amount. Most banks charge a fee when converting currency. This may be a flat rate or a percentage of the total amount being exchanged.