Final answer:
The Office of Foreign Assets Control (OFAC) regulates banking of specially designated nationals in the U.S. Alongside OFAC, the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA) oversee financial institutions for compliance with federal regulations.
Step-by-step explanation:
The regulation that monitors banking of specially designated nationals and prohibits their banking in the United States is called the Office of Foreign Assets Control (OFAC) regulations. OFAC is a division under the U.S. Department of the Treasury and is responsible for enforcing economic and trade sanctions against countries and groups of individuals involved in terrorism, narcotics and other disreputable activities. When a person or entity is added to the OFAC's list of Specially Designated Nationals and Blocked Persons (SDN list), they are barred from conducting financial transactions within the U.S. financial system. In addition to OFAC, the Office of the Comptroller of the Currency (OCC) oversees bank supervision and reviews the balance sheets of banks to ensure they maintain positive net worth and do not take excessive risks. The OCC has a national staff of bank examiners who conduct on-site reviews of the largest national banks and any foreign banks with U.S. branches. Moreover, the National Credit Union Administration (NCUA) supervises credit unions and ensures their operations comply with federal regulations.