OK, here is the correct information regarding Penguin, Overdrive, and Amazon.
In its November decision to not allow library lending of its new titles (via any vendor), Penguin had initially also targeted OverDrive’s relationship with Amazon as a particular concern, which led the company to demand that OverDrive disable the “Get for Kindle” functionality for all Penguin ebooks.
The company backed away from that demand, but the security concerns have likely never been allayed. When borrowing with a Kindle via OverDrive, the transaction essentially is removed from the public library and takes place under the terms that Amazon has worked out with OverDrive.
What Amazon needs to do is give Overdrive everything it needs to allow Kindle eBooks to be served via Overdrive like ePub is. Granted, you'd lose Whispersync and any other Amazon features specific to just Amazon, but maybe then we could get Penguin back to the library.