Is a Holding Company director, who is not a director of the bank, subject to the collection of related interests (215.8) and loans against non-publicly traded stock (215.10)?

The holding company is an affiliate, so yes.

If there is a holding company involved, how are there shares of the bank to borrow against?

My point exactly . Management is trying to tell me the "rules have changed" and all the HC directors have to provide is the related interest form due to FRY-6(?) reporting.

What in the world does a director's related interests have to do with filing a FR Y-6?

I have no idea. I honestly don't even know what an FR Y-6 is (haven't looked it up yet).

We have a holding company director who is refusing to provide Reg O information other than the related interest piece and I think he should also be providing information on any loans against the holding company stock per 12 CFR 215.10. Management is telling me I'm wrong, and this was their reason why.

They are partially right for the wrong reason. FR Y-6 is the holding company reporting what affiliates they have.

"that is secured by shares of the member bank."

In my original answer, I basically said, what shares of the member bank? There are no "bank" shares if you have a holding company. The holding company owns the bank, there are no share holders except the holding company.

BankXX stock as collateral for a loan

Some have questioned why we cannot service our stockholders and make loans collateralized in whole or in part by BankXX, N.A. stock. For national banks, banking regulation 12 USC 83 stipulates that banks cannot make a loan using their own stock as collateral.


12 USC Sec. 83 01/03/05
TITLE 12 – Banks and Banking Chapter 2 – National Banks

Subchapter IV – Regulation of the Banking Business; Powers and Duties of National Banks
Sec. 83. Loans by bank on its own stock
-STATUTE-
(a) General prohibition - No national bank shall make any loan or discount on the security of the shares of its own capital stock.
(b) Exclusion - For purposes of this section, a national bank shall not be deemed to be making a loan or discount on the security of the shares of its own capital stock if it acquires the stock to prevent loss upon a debt previously contracted for in good faith.

While this is a regulation of the Office of the Comptroller of the Currency, the other regulators have similar laws.

Reason (the confusion)
For many of us, it might seem odd – for example, at Bank of America (“BoA”), you can walk into any BoA branch office with BoA stock and walk out with a loan. There is a very subtle difference. The bank is Bank of America, N.A., and the stock is Bank of America Corporation – the holding company. If an applicant walked into a BoA office with Bank of America, N.A. (bank) stock, they would be declined for collateral. The holding company is a separate entity, and not the bank. (The same for Wachovia Corporation [HC] and Wachovia Bank, N.A. [bank], The South Financial Group [HC] and Carolina First [bank], First South Bancorp, Inc. [HC] and First South Bank, etc.)

Logic
If a bank had to liquidate the loan and take back their stock, it would have to be considered Treasury stock. Treasury stock is a direct reduction to a company’s Capital account, and a reduction in the number of shares outstanding.

A customer could go to any other bank and get a loan on BankXX stock, just as we can take stock from any other bank as long as the loan and collateral otherwise meet BankXX’s underwriting guidelines.

Please let me know if there are any questions.

Actually, they don't. Only the OCC. Other banks are State chartered and it will depend on State law.