"I hate this loan. I hate you for getting this loan. You realize we're making like $450 on this loan? I hate this loan. I think I hate you. You better sign this." First bank loan I ever got was for a car. Think I borrowed like 8 grand. They ran my credit and decided I could borrow 8 grand for like 1.75%. That was fifteen-twenty years ago; a stupid low interest rate was an anomaly. Now? Now the banks have to make money at that rate all the time. Fundamentally, a repo rate above what the Fed wants it to be means that the banks are not incentivized to participate at the Fed rate. Lack of positive incentive? They don't make enough money to bother. Negative incentive? They don't have the cash to cover it. I am not a bank. But I know that banks lending money to other banks is not where the money is right now.
