In the case of venmo (and many other of their customers), it was actually Plaid that was asking for your bank login credentials to connect your bank account to Venmo. They've been getting criticism regularly for that, unsurprisingly.
Doubly fuck no.
Venmo could also get the credentials if they want to, since they're launching it from within their own app. They could keylog everything in their app if they wanted to, including what happens inside Plaid.
Nobody should ask for passwords to anything but their own service. Period.
Asking for bank passwords should be made illegal. If I were the president I would have made that a federal law yesterday.
Plaid provides a useful service that's a stop gap for the poor infrastructure of banks. I honestly doubt that most banks would have even bothered to start the laborious process of OAuth without them being an extremely popular middle layer for services like YNAB. My company actually uses them to process recurring payments.
Plaid is not useful if they need to ask for passwords.
That doesn't mean you should trust them (I don't), but just because you haven't heard of them doesn't mean they're not big.