Who controls your city's money? | Trinity Tran

0:00Everyone I know has at one point or another borrowed some money from a parent, from a sibling, from a partner, from a friend. And sure, this can be a potential risk on a personal and relationship level. That's a whole other podcast episode. But from a business perspective, one of the clear advantages of this type of arrangement is that there's usually no interest or fees. But when it comes to local governments, what options do they have? We want our money invested locally not flowing outwards to Wall Street and private lenders, but interest fees and other contractual stressors. Those are real concerns.

0:41What if there was a bank whose only priority was investing in local economic development and not making some faraway shareholders happy?

0:54I'm Madhupa Akinola. This is TED Business, a podcast from TED. Our speaker today, economic justice advocate Trinity Tran, is here to champion public banks. By lowering the cost of financing itself, Trinity argues that a bank owned by people via their local governments is a way to ensure there's more investment in local infrastructure without the raising of taxes. Then after the talk, we'll hear Trinity speak more about public banking with Lily James Old, director of TED Fellows. But first, a quick break.

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4:57When a community wants to build like a bridge or transit system, housing, sustainable infrastructure, where does the money come from? Money ultimately decides what gets built. Money decides what survives. Money decides what future becomes possible. So change where money goes and who controls it, then you change what becomes possible. I'm Trinity Tran. I lead efforts to build public banks in California and beyond. Most of the time, our cities don't have the money up front to be able to pay for a project like a bridge or housing. And so they will issue a bond, which is essentially a long-term loan structured by Wall Street banks.

5:43alone is money that is provided up front and paid back over time with interest. Wall Street banks, private lenders end up tacking on fees to structure and sell those bonds. Then the reality is that our local governments are not only paying for the cost of the project, but decades of interest on top of that. So for every dollar that we're borrowing, we're paying another dollar in interest over time, sometimes more. And that's all money that's going out the door to private lenders. We're paying hundreds of millions of dollars in the city of Los Angeles at the state level in California. We're paying$4 billion in interest annually.

6:24That's money flowing out of our communities rather than being invested locally. Private banks are owned by shareholders. They're investing in areas that make them a lot of money and not necessarily what's in the best interest in our communities. Public banking asks a different question. And how do we do more with the dollars that our communities generate without raising taxes, but by lowering the cost of financing itself? A public bank is a bank owned by the people through their local government, either city or region or state. Every time you, for instance, buy something like a cup of coffee, a portion of that tax will go to your city and your state.

7:07So we're using the money that we already generate that belongs to us. They don't have shareholders to pay so that as loans are repaid, it comes back into a public bank. Its mission is to support the local economic development of the community it serves. That would be designed at a local level. So the law that we created, the California Public Banking Act, creating the legal framework for cities and municipalities to be able to form their own banks. And so the mission of the bank, the mandates, the lending priorities, investment priorities, the capitalization strategies, all the details of how this is going to work is going to be defined at a local level.

7:47There are 900 public banks globally with nearly$50 trillion in assets. In Germany, a network of 400 municipal banks was able to support the country's renewable energy transition. In the United States, we have a successful model to emulate. The Bank of North Dakota is a 100-year-old public bank founded in 1919. It was started by socialist farmers who were being gouged by out-of-state New York bankers. During the Great Depression, nearly 200 ,000 farms were being foreclosed on. Because the state of North Dakota had a public bank, it was able to step in and buy the farms and lent it back to the families for a dollar.

8:34Once the families were able to stabilize, they sold it back at a price they could afford. For the last century, it has supported local economic development, supported small businesses, infrastructure, while still returning very healthy return on equity, 15 to 18 percent. That means it's returning hundreds of millions of dollars back into the general fund year after year. So that's an example of how a public bank is able to step in and support and strengthen the community without focusing on just purely profit. Los Angeles just dealt with a devastating wildfire. So if we had a public bank, it would have been able to step in to offer immediate low-cost loans.

9:20It's able to be immediately responsive to the needs of the community without having to wait for federal aid, which can be unstable. We're moving towards building a system that mobilizes public revenue to support our public priorities. We've seen such an incredible amount of progress in such a short time because even without a complex understanding of finance and banking, When you start explaining public banking, it makes sense. On a logical, intuitive level, multiple cities and states are working towards it. We have the ability to create a new system. This isn't a pie-in-the-sky idea. This is a model that works for the people, our communities, and our environment.

10:12So

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12:37To grab your PACA hoodie, go to www.pacaapparel.com. That's www.pakaapparel.com. And now, a conversation between 2026 TED Fellow, Trinity Tran, and TED Fellows Director, Lily James Old. Trinity, welcome. Thank you for having me, Lily. Before we dive into the fascinating world of public banking, I wanted to understand your origin story a little bit better and just understand how did you end up in public banking? Right. How did I end up in this beautifully wild fight against Wall Street? Well, I'm a second generation Vietnamese American raised in Southern California. And growing up in a working class household, I think really gave me an early sense of power and money and how that shapes things and whose lives are protected and whose are left exposed and how fragile everything becomes when you don't have access.

13:50So I think that embedded something deep in me, like this deep sense of responsibility to figure out how do we move the levers of society and level the playing field for everyone. And I didn't really have a word for it then. I just knew I had to do something. You know, I don't see this as work. I see this really as a calling, part of a sacred mission at that. You know, I'm not a banker, not an economist, don't have a finance background, but this fight has always been a natural course that I follow through in my life. About a decade ago, I went through a period of awakening and kind of developing my own spiritual practice.

14:35I was meditating daily. I was living kind of like an urban monk in Los Angeles and really going inward. And that really made the sense of urgency of the moment, like impossible to ignore. And after a year, I didn't know exactly what change would look like, but I knew I had to jump in and start figuring it out. So at some point you have to move. I also wanted to frame this by just asking, what does money mean to you? Yeah, I think at the root of it, I think all everything that we want to build in this world comes down to money. You know, it's one of the deepest levers of power in our society. It decides what future becomes possible.

15:22So if we want a different future, we have to change the direction in which money flows and who it ultimately benefits. And so when we looked at all of the fights that activists and organizers were fighting for in Los Angeles and in cities and states nationwide and worldwide, whether you're affordable housing advocate, whether you're fighting for transit modernization or climate infrastructure, it all comes down to how do you pay for it? Where does the money come from? Was there someone in your life who asked those questions and set that kind of example for you? Well, for me, I grew up being raised by a single mother.

16:04So that gave me, I think, a deeper sense and awareness of some communities have a lot and some do not. You know, there always seems to be money flowing into certain communities and opportunities and investments. And others are struggling and teetering on the edge of survival. So that, you know, again, kind of gave me this deep sense of responsibility to figure out how do we really build a system that works for everyone. And how did how were you first introduced to public banking? So the work around public banking emerged through our divestment movement. So 2017, there was a movement, the Standing Rock movement happening in North Dakota, where indigenous water protectors took on oil pipelines that were encroaching on their land.

16:58And that really ignited the wave of the modern wave of divestment movements across the country. And we were so inspired by that fight where you had indigenous leaders and allies taking on the oil pipelines and the banks financing the oil pipeline. So in 2017, we launched Divest LA, really inspired by that fight. Councilmember Kishama Sawant in Seattle was the first to divest from Wells Fargo. That was one of the financiers of the Dakota Access Pipeline. And we looked at Los Angeles and that was also one of the primary banks here in LA. And this was, you know, a bank that was tied to predatory lending and illegal foreclosures of working class families in addition to financing fossil fuel projects.

17:44So we felt that by virtue of our dollars sitting in a bank like Wells Fargo, we were essentially, you know, complicit to those crimes against our pathways. So we started spending the weekend reading banking contracts and figuring out where our money was set. There were over 800 accounts in Los Angeles. And, you know, to build other other people are going to the movies and you're reading banking accounts with your colleagues and partners. Yeah. You know, at the end of the day, you can't fix something unless you know what's broken. So we had to really get into the technical details of what it would look like to move money.

18:23You can't move billions of dollars just, you know, screaming on a megaphone from the sidelines. You have to be able to sit down with city finance offices and legislators and policymakers and have those conversations to figure out what an alternative would look like. In Los Angeles,$2 billion of our city funds are flowing to fossil fuel companies, multinational corporations. They have no real obligation to serve the community. So we asked a simple question, why are we depositing our public dollars into institutions that were actively harming our communities and our environment. And so we led a nine-month fully grassroots campaign.

19:03This was volunteer-led, unfunded. And we pushed the city of LA to disqualify the bank from the city's commercial banking services contract, and they divested about$40 million in holdings. So that was street action meeting legislative action. You know, you keep saying we. Who is behind the we? And who were those that you were sitting elbow to elbow with at the table reading those banking papers? Yeah, you know, I'm a lead organizer of the movement, but this is a collective movement. It's people from all walks of life coming together to figure out how to take on the big banks. This is Main Street versus Wall Street.

19:46And so you have pro bono lawyers, we have small business owners, educators, retirees, community organizers. And that's, you know, that's one of the things that makes this movement so beautiful. It's really all walks of life. It's funny, I kind of laugh that we are like a scrappy activist movement taking on one of the most powerful industries on the planet, you know, mostly armed with Gmail accounts. But that's what makes this movement so beautifully organic and I think powerful because it's so genuine. It's people who are trying to cobble together resources and leverage where we can and strategize together to take on a centuries-old entrenched industry.

20:32You helped create the California Public Banking Act, the first law in the nation that lets cities and municipalities create public banks. Can you help clarify what does that legislation allow and what does it make possible that wasn't possible before? So before the California Public Banking Act, California had no clear legal framework for cities or counties to be able to form their own banks. So we placed our public dollars in private financial institutions and big banks because we don't have a public alternative. So what our bill did was it created the first law of its kind in the nation that gave municipalities a legal mechanism to establish a publicly owned bank that's chartered, regulated, accountable to the public.

21:27And the only similar creation before this was the Bank of North Dakota that was formed over a century ago. That's a state owned bank. So our law, the California Public Banking Act, created the framework for city-owned banks that had never existed in the U.S. So right now, cities and counties in California are at various stages, early stages, of exploring and forming public banks from funding feasibility studies to exploring capitalization strategies. And from a process perspective, I'm curious to hear how did the North Dakota legislation act as a template for the work that you all do versus, you know, how is the work that you're doing breaking new ground in that capacity?

22:14I would say it's more of an inspiration than a template. Their model of a state bank was created in 1919. That was over a century ago. And it was deeply embedded in agricultural financing for a rural red state. And what we're building is something for California, urban, diverse, you know, 50 times the size of the economy of North Dakota. But we studied the North Dakota model very closely. We talked to their leadership and used their proof of concept really as, you know, ammunition to help move skeptical legislators. This is a successful model of how this works in a deeply red state and has worked for over a century, returning hundreds of millions of dollars back into the state's general fund.

23:05Yeah, I was going to ask, so is the structure of how the public bank in North Dakota still functions similar to how it was created in 1919? Yes, yes. Fascinating. We're building a similar model. It's a wholesale model. So this isn't a brick and mortar ATM and teller bank on every corner model. This is where essentially the goal is to lower the cost of capital and it partners with community banks, credit unions and CDFIs to support a local financial ecosystem. I'd love to use that as an opportunity to speak a little bit in more depth about the mechanisms and the structure behind a public bank versus a private bank.

23:47Could you just talk us through, for those who aren't familiar, the difference between those two structures or the similarities for that matter? So the goal is to create a public partner bank that serves local governments and it channels capital back into our communities. So right now in cities across the nation, you know, our public dollars are deposited in private banks and those dollars are then leveraged to generate short term profit for shareholders. At the end of the day, they're accountable to their shareholders and their bottom line. So they're investing in areas that tend to generate profit for shareholders.

24:29So you're talking about fossil fuel projects and defense industries. They're typically not interested in investing in homes and building schools. And so the mechanics of how a public bank works exactly the same as all banks, it's just the direction of value changes. And one of the most powerful parts behind a public bank is its ability to leverage capital. So the power is in the multiplier, which is something that all banks do. We're bringing that power back into the hands of the people. So that's the same financial mechanics every bank across the nation uses. The difference is what we choose to finance with that leveraged power, housing, climate solutions, infrastructure, and not world pipelines and private profit.

25:17So just to get into the logistics, so you're saying that basically the interest that would, in a private bank, go back to those shareholders, back to the private Wall Street banks, that's going back to the public banks themselves. So the interest is the same, but it's going to a different place in the end, essentially. The interest would be lower for a public bank. So you can look at measure. In Los Angeles, we had Proposition HHH. And that was a bond measure to build about 10 ,000 units of affordable housing. So the city borrowed about$1.2 billion. But they had to pay about$700 million in interest on top of that.

25:58So for every bond that our city issues to build a bridge or a home, Wall Street packages those bonds. And you're paying decades of interest on top of that. So a public bank would be able to significantly cut the need for that expense of borrowing, and we could have redirected. You know, that$700 million could have built over 1 ,000 more homes. So that's the practical reality of what we're fighting for. And can you explain for those who might not know why the interest rate is lower in the case of public banks? So you're lending money to be able to get money out the door faster and cheaper to build homes and schools and infrastructure and transit and support community lenders with small businesses.

26:46When you remove the profit motive, you're able to essentially get money out the door faster and cheaper to build the things we need. Don't go away. We'll be right back with more of Trinity's conversation with Lily right after a short break. Today's episode of TED Business is brought to you by Olympic Hospitality. The Olympic Games are coming to Los Angeles in 2028. This is a once-in-a-generation event that you will not want to miss. It's more than a ticket. It's a story you share with your family and friends. And the ultimate way to get closer to the action is with an Olympic Hospitality package.

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29:03How do public banks get the money to fund bigger projects, you know, bridges or other kinds of infrastructure projects? Where does that funding come from? So there's the deposits kind of getting into the mechanics of a bank. The deposits would come from money that the city banks. Right now we have billions of dollars in public funds that sit in private institutions. So the deposit base would come from local government and regional agencies. And with lending, local governments can then borrow directly from the public bank to be able to fund projects. So that essentially bypasses the private middleman or the commercial for-profit banks.

29:50So that allows them to support local initiatives, community-identified priorities through lending, and not losing public funds to out-of-state larger banks. because right now when our city or one of its departments borrows money and then has to repay it, that's essentially money that either goes directly to big private investors or leaves our communities and it doesn't return. And so in this way, as loans are repaid, it comes back to the city and gets reinvested back into our communities. So we're creating a permanent community-owned source of capital that can be reinvested year after year. So rather than depositing public funds in private banks, which uses them for private profit, a public bank can serve as a public depository for those funds.

30:35So that's part of the first initial step of the law that we created was that local governments would create a feasibility study, which is a detailed analysis of what the capitalization strategies are, what the governance structure is, the mission, the lending priorities, all the details of how this is going to work is the first step per the California Public Banking Act. So that's an exciting step because this is our cities and our states doing the due diligence work that it needs to figure out how do we better coordinate all of the fragmented funding streams across our cities and our states from housing, climate, infrastructure, small business.

31:14How do we streamline and centralize that so we can support our communities leveraging the public dollars that we have that are right now being leveraged for private profit? How do we bring that back home so that we can use our own public dollars for our own public good? And just for a second, play the, let's say, the capitalist skeptic. If a project is being funded by a public bank and that project doesn't pan out or costs more than anticipated, what happens in the case of a public bank? Who's actually on the hook for that money? Is it the taxpayers or how does that work? Well, the Bank of North Dakota has existed for over a century and it is more profitable than Goldman Sachs and JPMorgan Chase.

32:03And this bank isn't positioned to, you know, profit necessarily. It's just it runs conservatively. It helps North Dakota farmers and small businesses and support student loans. But it's not getting into the risky casino gambling and derivatives that led to big banks getting a massive$700 billion public bailout in 2008. So you can kind of draw the logical conclusion there is that if the government is ultimately responsible for the stability of the banking system and had to swoop in and bail out the private sector when it fails, then why not make it public to begin with? You know, that's not a radical question.

32:43That's a logical one. You know, a public bank, it lends conservatively. Its model is built around just supporting public goods like housing and transit and infrastructure. So it's a safe model. It's a public bank. So public bankers aren't making$30 million compensation. Public bankers are public servants. Yeah, yeah. So cool. It makes me want to pick up a bank manual. Oh, we love it. We love it. I mean, we have one public bank in the United States, but this isn't an isolated idea. There are over 900 public banks across the world with nearly$50 trillion in assets. So this works successfully across the world, including half of Europe.

33:26Well, it's interesting, you know, one of my team members on the TED Fellows team is German. And when we were first speaking to you, I remember she sort of was saying, wait, why is this such a radical notion? This is true of all banks in Germany. How do you see models like that possible to work in the United States? How might the work that you're doing in California scale to the state, to the country? The German model, the Sparkhausen model, is the most cited model for a good reason. It's a network of 400 public savings banks that are really deeply integrated in German local economies. They finance small and medium businesses that private banks won't touch.

34:12They have helped the country stabilize through multiple financial crises. And impressively, they are responsible for over 70 % of the country's renewable energy projects. But you also have public development banks across Latin America, co-op banks in Switzerland, community development financial institutions, CDFIs in the UK. So I think, you know, how does that scale for California? And California is the fourth largest economy in the world. You know, we always point to North Dakota, which is 50 times smaller. But the reality is a state like North Dakota is 50 times smaller than California's economy and has been able to successfully run a bank for over a century.

34:54You can imagine the power, the potential and the impact at our scale with a$4 trillion economy. Yeah, not exactly small potatoes. So I think one question I have for you also then is, why do you think it fell short of expanding beyond North Dakota? Two words, banking lobby. So the banking industry have spent 100 years making sure that this idea stayed quiet. And, you know, that's why it's still kind of esoteric and out there. You can kind of draw an example of here in Los Angeles. We had one of the greatest electric streetcar systems in the world that connected communities all across L.A. And then the auto lobby, you know, bought them up, ripped them out of the tracks in the 40s.

35:44So they dismantled an entire public infrastructure system so that cars, GM cars, would be the only option. So, you know, what's the result of that? We're sitting in hours of traffic every day. So the banking lobby is trying to do the same thing with public finance or has done the same thing with public finance. You know, you eliminate the alternative. And the other I would say is that I think creating public infrastructure and systemic change, it takes time. It takes time to be able to educate people on what this is. Banking and finance is intentionally created to be complicated where nobody understands it.

36:23We sit in rooms with legislators and policymakers and we have to break it down. That's why we had to spend weekends learning banking and finance, learning the language and the technicalities and the details so that we could figure out how to demystify it. So that ordinary folks not only understood it, understood the power behind it, but were inspired to do something around it. So that has been largely done on a grassroots basis. But once you explain public banking, it just clicks. It's a lightning bolt idea. that it's just common sense and practical. Why are we sending billions of dollars out of our communities year after year to Wall Street and big banks while we can keep it here, recirculate it back into our community and leverage it to be able to fund the things we need?

37:09You know, the banking lobby has been powerful, is powerful, but we did pass the California Public Banking Act with lobby firms trying to kill it. And we did that as a grassroots movement. David and Goliath, for sure. It is a total David and Goliath fight. You mentioned the L.A. wildfires as a moment that a public bank could have stepped in immediately in a different kind of way that was, you know, more advantageous to the state and the communities. Can you break this down a little bit more? What are other examples or situations that you could cite where you think that public banks would make a real difference?

37:46So, you know, when Altadena was burning, people lost everything, right, within hours. And then, you know, the weighted FEMA was slow. And that's kind of partly by design. And, you know, insurance companies were already pulling out of California before the fires. So private banks aren't in the business of providing, you know, fast, low interest emergency loans to people who just basically lost everything and lost all their collateral. So the gap between disaster and recovery is where, you know, communities really bleed out. So a public bank could have stepped in to deploy capital immediately. So you're talking about low-cost financing to rebuild homes, support small businesses that were on the edge of survival, and really help stabilize communities before federal aid arrives.

38:36So it gives our cities and potentially our state the ability to respond in real time to emergencies with their own resources instead of having to wait for Washington or for big banks. You're talking about fire prevention, climate resilience, infrastructure. All of that requires money. It requires upfront capital that communities currently can't access at any kind of reasonable cost. Look at Flint. People were being poisoned by their own water supply for years. And the government officials knew about it, but said nothing. Fixing the pipelines weren't a priority because it wasn't profitable. Every city trying to build affordable housing, they're constantly hitting a financing wall.

39:19You need financing for the things we need. So with the Trump administration having frozen and scaled back all the GGRF funds, the greenhouse gas reduction funds, the need for public financing alternative, it's never been more urgent than it is right now. And so those situations are everywhere. It's really the tool is what's missing. What do you see on the horizon as AI becomes more prevalent in banking and finance? Obviously, that's both on a municipal level, but on individuals as well. What kind of role do you think technology will play, does play in the work that you're doing and the change that you're trying to make?

40:05It's still kind of an underexplored conversation that the public banking movement needs to have, especially with the kind of advent of digital currency and all. What we're dealing with is the immediate reality of people who don't have bank accounts in this country. You know, So it's low-income communities, undocumented immigrants, communities of color who have been sidelined and ignored by the banking system. So when you're talking about like AI and digital currency and blockchains and stablecoins, you know, those tools could help people kind of get out of fee-based structures and people have been locked out of banking.

40:46But where we're at right now in the public banking movement, specifically in California, is we're dealing with a population of over 7 million people who are unbanked or underbanked. So that means that's one in five Californians. That means they don't have a bank account. They don't have adequate access to the bank account. So you're talking about, you know, low wage workers who have to hop on a bus and travel for two hours to get 10 percent taken out of a hundred dollar check. So in addition to the wholesale banking work that we're doing, we're also working on the Cal Account program. So that would be the nation's first universal banking services program.

41:23It doesn't create a bank that partners with existing banks to provide zero cost, zero fees, zero penalty banking for all Californians. So when you're dealing with that 7 million plus unbanked or underbanked population in California, you've got a mom with two kids who needs quick cash to pay for milk and diapers. Opening a digital wallet isn't really practical for millions of people right now. So we're still working in fiat cash. That's the reality we have to meet people in. But I think digital tools are the future. publicly controlled digital infrastructure as a genuine financial inclusion tool, I think, is going to be a frontier that this movement will move towards.

42:08But we're working to get people into the financial system first. Yeah. Involve it with them. What would you say to somebody who wants to get involved, wants to be able to begin this kind of work in their own cities? Where would you advise them to begin their journey in terms of this work or even just this education? Find local public banking organizers here in California. We have coalition hubs across the state. We represent advocates in 10 cities and regions across California, and we are networked with organizers across the U.S. but starting at a personal level, you can move your personal money into a credit union that aligns with your values.

42:53And I think for the organizing and advocacy aspect of it, for anyone wanting to get involved, you don't have to start from scratch. Find organizations that are already doing the work that you care about in the communities, affordable housing coalitions, climate groups, labor unions, small business advocates, those are movements that a public bank directly touches and accelerates. So join them first, get embedded, and then build public banking as an arm of that work. Because once people see that public banking is the answer to the question that they're already asking, how do we pay for this? It becomes really, I think, a natural extension of everything that we're already fighting for.

43:30You know, you just got to connect the dots and then, you know, show up to city council meetings, talk to your local representatives about where your city or your state is depositing its funds. start from there. And, you know, once people realize that we have hundreds of millions, billions of dollars sitting in bank accounts, earning next to zero in interest and being invested in things that don't support our communities, you start asking, what if it didn't? You know, what if it was ours? What if we were able to keep it here and leverage it to build the things we need? Trinity, as always, I've learned so much from this conversation, and I I really do hope that we can continue it in future iterations.

44:09So thank you for your time and sharing your work with us so generously. Thank you, Lily. I always appreciate you and the TED Fellow community. Appreciate it. That's it for today. TED Business is part of the TED Audio Collective. This episode was produced by Hannah Kingsley-Ma, edited by Alejandra Salazar, and fact-checked by Julia Dickerson. Special thanks to Maria Ladias, Farah DeGrange, Daniela Ballarezzo, Tansika Sungmanivan, and Roxanne Heilash. I'm Madhupa Akinola. Thanks for listening.

45:02so you can monitor and engage with the account while your teen learns how to invest and manage money. Learn more at schwab.com slash teen. There's a lot of concern that AI could interfere with how kids learn and develop. But what happens when we actually ask students how they want to use these tools? There's an opportunity to help young people build self-awareness around AI and learn to use it in ways that empower rather than undermine them. The narrative out there is that they cheat. But what you actually see is that so many students, when they learn how to use it, are looking at sort of problems in the world that they want to solve and building solutions and not waiting for permission.

45:41They're just building. That was VP and General Manager of Education at OpenAI, Leah Belsky, who joined me, Molly Graham, on my podcast Work Life to address how we can find solutions to real, valid concerns around AI's widespread implementation in education. What do we want humans to be able to do in a world where intelligence is infinitely accessible? Listen to Work Life anywhere you get your podcasts.