We investigate market power in U.S. equity securities lending and assess its effects on distinct investor groups. Our data reveal high market concentration, non-competitive fees, and an excess supply of lendable stock inventory throughout the cross-section. Motivated by these findings, we develop a dynamic model that shows how intermediation and market power emerge as responses to short sellers' concerns over information leakage. Our quantitative analysis suggests that both short sellers and asset owners likely prefer the current intermediated market structure to a counterfactual centralized alternative—especially for smaller, less liquid stocks—since information leakages that would arise in a centralized venue undermine the very foundation of short sellers' business model. We estimate that, across stocks, non-competitive fee income increases lenders' valuations by between 1.4% and 90%.