For a national bank, you can take holding company stock subject to 23A restrictions as a transaction with an affiliate. The total of loans secured by bank stock are subject to the 10% limit for transactions with one affiliate. There are other concerns that some banks address through their credit policy. One large bank I once worked at considered this undesirable due to the potential conflict of interest. You mismanage the company, stock price goes down, now you have to demand additional collateral from your customer. Other banks allow it and are not (yet) concerned about the above conflict.
Kathleen Blanchard CRCM "Kaybee"
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