We recently put two large ponds in connected by a creek.In my county you must get a permit and have it inspected. Three things they require are a walk down (vs a steep bank) and it must be sodded down about three or four feet into the water and be 50 ft from your lot line.
We used Bahai to sod it but I don't know if that will grow in your zone. The grass dies down but the roots stay in place. We have also been adding Native willows,weeping willows,B.Indigo etc. Native plants that like water.We do however have one bank that is a problem.It was an area that upon digging we discovered an old dump. We hauled it all away($1500 dump fee!)but I think that area of the bank may have had so much decomposing as the water seems to be getting higher.But the sod and plants are still in place and it is getting closer to the lot line! Now we know why they require 50 ft!!! The Flow well also comes out to the east of it and it may be forcing the bank back. We are going to slowly add cement bags to help stop the movement.The reason I say slow is because I don't know at what rate it would change the PH of the water and I sure do not want to kill the bass,tilapia and bream.
I think ponds are like houses or swimming pools, their is constant upkeep but if you nip the problem early you can save a catastrophe.
If you are lucky enough to have large rocks that might be a possibility also. Good you caught it now!