New employee mentioned a previous bank employer offered a discounted interest rate to VP and above level officers. That's something I've never run across. Is that practice compliant?

Not if they were Regulation O officers. They would only be eligible for employee loan discounts that were available to all employees.

And, ironically, VPs are considered Exec Officers by default unless there a board resolution that excludes them [Reg O § 215.2(e)(1)