Perhaps no company understands fintech’s rollercoaster ride over the past few years better than Plaid. Founded in 2013 by Zach Perret and William Hockey, Plaid operates as a kind of plumbing between financial institutions, allowing consumers to seamlessly link accounts across platforms from Robinhood to Chase.
As fintech boomed, so did Plaid, announcing a staggering $5.3 billion merger with Visa in early 2020. But, even before Lina Khan started haunting the dreams of techies, the Justice Department sued to block the acquisition, with both parties abandoning the deal in early 2021. Like many of its peers, Plaid faced a sinking valuation and layoffs, though the company has since rebounded.
Speaking from Plaid’s New York office last week, where the startup is sandwiched in a Kushner-owned SoHo office building between OpenAI and Thrive Capital, Perret told me that we’re currently in a “fintech spring,” with flowers (which, I guess in this metaphor, are M&A deals) starting to bud. “It’s still early,” Perret said. “We’re not yet in summer, but it’s a cyclical business.”
The thawing regulatory environment is behind the season change. Plaid might not be in the market for a merger anymore—at its current size, an IPO is more likely, with Perret hinting at a public offering in the next few years. “That’s certainly the direction we want to go,” he told me, calling the failed Visa deal a “blessing in disguise.”
Still, with the new free-for-all after Khan’s departure, an improved environment for M&A means that Plaid itself can make acquisitions, like its 2022 purchase of the identify verification startup Cognito. And more money into the sector means that its potential clients will have deeper wallets to experiment with new products and customer acquisition—a boon for Plaid.
The conventional wisdom is that Trump will create a boom time for American business. But the chaos of the past few weeks seems like a precursor to what could come, with the administration seeking to shutter whole agencies overnight and change policies on a dime.
What does that lack of predictability mean for a company like Plaid? Perret said he tries to keep on “blinders” to the politics of D.C., but regulatory shifts will directly impact his company. One vital example is open banking—a policy first introduced in 2010’s landmark Dodd-Frank financial reform that was finally enacted as a rule by the Consumer Financial Protection Bureau last October.
Open banking is a useful frame for understanding the shifting balance of power between the tech and banking sectors, and why those dividing lines are often so blurry. In many ways, open banking is the realization of Plaid’s entire business model—allowing consumers to more easily control and port their information between different institutions. Practically, as per the CFPB’s rules, it would force institutions to adopt technological systems to be able to move around data.
Plaid has championed the concept, especially because it would directly benefit many of its new business lines, such as credit scoring, which collects data from consumers (with their permission) across the different accounts they have connected to Plaid and allows them to use it to apply for loans. Perret said the open banking rules would create “lower latency” for data transfer.
Banks, predictably, have not been entirely on board. One of the industry’s leading trade groups, the Bank Policy Institute, filed a lawsuit against the rule in October arguing that it was unconstitutional and that the change would jeopardize sensitive financial information. Under the CFPB’s framework, large financial institutions will have until 2026 to comply, meaning open banking could die before it ever arrives.
So what’s going to happen to the rule? Republicans have long had the CFPB in their crosshairs. Still, the agency received rare bipartisan support on open banking, with then-House Financial Services chair Patrick McHenry (R-N.C.) praising the proposed rule.
But the future of the agency is shaky. The Trump administration didn’t even find a new, full-time chair after firing Rohit Chopra, instead appointing Treasury Secretary Scott Bessent as the acting head. He immediately halted all the agency’s work, including any enforcement of its rules, which would include open banking. A few days later, Office of Management and Budget director Russ Vought took over as acting head. He announced this weekend that he would halt funding to the agency, calling it a “woke & weaponized agency” on X.
The coming months might bring a fintech summer, especially with venture capitalists in charge of D.C. Still, it won’t be a smooth ride getting there, especially as the Trump administration continues to iron out its own policy priorities. “We’re waiting with bated breath to see what’s going to happen,” said Perret.
One more thing...26-year-old software developer Suchir Balaji was found dead in his San Francisco apartment last November, just a month after he went to the New York Times to voice his concerns that his former employer, OpenAI, was violating copyright laws. Though officials deemed his death a suicide, his mother is convinced he was murdered. Her efforts to make sense of the inexplicable tragedy have collided with a teeming online world of conspiracy theories all too eager to latch onto grief and uncertainty. Allie and I have a new feature detailing the story, which you can read here.
Leo Schwartz
X: @leomschwartz
Email: leo.schwartz@fortune.com
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