Preheat oven to 350 degrees. Line a muffin tin with baking cups.
In a large bowl, cream together butter and sugar. Add eggs, one at a time. Stir in vanilla extract.
In a separate, smaller bowl, whisk together flour, baking powder, and salt. Stir in half of this flour mixture to the butter mixture. Mix in milk, and then add the remaining flour mixture, mixing until just combined. Fold in crushed vanilla wafers.
Fill baking cups 2/3 of the way full and bake for 18-20 minutes, or until a toothpick inserted in center comes out clean. Transfer to a wire rack to cool completely before frosting.
Banana Pudding Frosting
In a small bowl, combine milk and instant pudding. Set aside and let the pudding set.
In a large bowl, cream together cream cheese and Cool Whip. Stir in pudding.
To assemble: spread a thin layer of frosting on a cupcake. Top with a vanilla wafer, then cover again with another layer of frosting. Repeat once more until you have two layers of vanilla wafers, both frosted. Top with one more vanilla wafer.
This frosting must be kept refrigerated, even after you’ve frosted the cupcakes.