Well, that seems to be the case.

The layer under the clay holds the water, when I broke through the clay, the water filled up from the bottom about halfway up the clay layer and stopped.

I'm assuming I will have to line the sandy loam portion of the bank down to the clay layer, so when watershed & rain fill up the pond, the banks wont soak it up...

When I got the pond permit from the county conservation dept. They said I could line the banks if I wanted to, but it was not a requirement...

I was told in my area, most pond builders dig a hole, wait a few years, and that's about it...

I was only given 2 requirements. Go at least 8 ft deep (I went 18 ft in some spots), and stay 50 ft from any property line... That's it...