Blending populist anger at Wall Street with a pragmatic interest in controlling the state’s finances, state House lawmakers are thinking about creating a state bank.

A state-owned bank could provide loans for alternative energy and technology projects or purchase the homes of families facing mortgage foreclosure to avoid evictions.

The state has more than $4 billion in assets at financial institutions, including $2.8 billion in Hawaii-based banks, mostly at First Hawaiian Bank and Bank of Hawaii. A state bank could hold some or even all of the state funds now deposited in private banks, assuming both the risk and the profit of managing taxpayer money.

The Bank of North Dakota is the only state-run bank in the nation, created in 1919 to satisfy the populist demands of farmers who distrusted eastern banking interests. But more than a dozen states have explored state banks in the past few years — fallout from the recession and from a lack of private capital for state priorities.

"We may have forgotten the traditional notion of what a bank does — the bank charter — of collecting together the community’s interest for the benefit of the community," said state Rep. Marcus Oshiro (D, Wahiawa), chairman of the House Finance Committee, which has moved several bills related to a state bank to the House for votes this week.

Alternative-energy developers and social-service advocates see the potential for a state bank to help finance projects that might reduce Hawaii’s dependence on imported oil or save families from mortgage foreclosure. Many also ask why holding taxpayer money in a state bank would be any less secure than in private banks, given the lessons of the Wall Street collapse.

The state’s budget advisers and financial regulators — along with private bankers — have reacted with respectful but pointed warnings that lawmakers are approaching risky ground.

No state has followed North Dakota into the banking business. Massachusetts, according to the National Conference of State Legislatures, looked closely at a state bank but decided against the idea last year, in part because public funds would have been exposed to unacceptably high risk.

With such a novel idea, and so much state money potentially on the table, lawmakers in Hawaii have said that a task force or a comprehensive review of state finance laws and regulations may be necessary before creating a state bank. The debate could also lead to something more narrowly crafted, such as a revolving loan fund for alternative energy or a mortgage buyback program for low- and moderate-income homeowners facing foreclosure.

A clean economy bank would provide loans for alternative energy and technology projects in Hawaii and other states, what lawmakers hope would be a national magnet for investment. A Hawaii First fund would be directed at island projects and businesses.

Budget advisers caution that a clean economy bank could overextend the state’s financial resources and have a detrimental effect on the state’s credit rating. Bank deposits would be guaranteed by the state, budget advisers said, which could restrict the state’s ability to issue bonds because the deposits would count against the state’s debt limit.

Iris Ikeda Catalani, the state’s commissioner of financial institutions, told lawmakers that a model might be Connecticut’s Clean Energy Finance and Investment Authority. Created last year, the authority is not a bank, but an investment fund that Catalani says provides low-cost financing for energy projects that private banks would not likely touch. The authority is financed in part by a surcharge on electricity bills.

Another model could be the Green Bank of Kentucky, a state revolving loan fund established with federal stimulus money. The Green Bank helps finance energy conservation projects at state buildings.

A Hawaii State Bank, meanwhile, could be a source of financing for a range of state projects and investments as well as a safety net for families at risk of losing their homes. Until the state bank is operational, lawmakers would have the Housing Finance Development Corp. set up an interim state purchase program for distressed homes, and allow homeowners to buy the mortgages back.

Oshiro, still stinging from the "too big to fail" justification behind the federal government’s bank bailout during the recession, said the 24,000 foreclosures in Hawaii over the past few years are "too important to forget."

"If we can go bail out the big banks and mortgage companies that got us into this mess, that played a role in this mess, that we’re uncovering today, why can’t we do so for the regular middle-class families, the working families of Hawaii?" he said.

Catalani told lawmakers that withdrawing state money from private banks and transferring the funds into a state bank could threaten the safety and soundness of local banks, which she described as the backbone of Hawaii’s financial institutions. She also warned that the interim state home purchase program could conflict with a multistate settlement with the five largest mortgage service providers over mortgage abuses. Hawaii’s share of the settlement is $71 million, money that would go toward homeowner loan modification, refinancing and direct payments to some who lost their homes in foreclosure.

Catalani suggested, as an alternative to a state bank, an initiative like the one at Boston Community Capital that helps Massachusetts homeowners facing foreclosure buy back their homes with new 30-year fixed mortgages. The new mortgage payments are withheld from homeowners’ paychecks to discourage defaults.

Gary Fujitani, executive director of the Hawaii Bankers Association, urged lawmakers to conduct a thorough study to determine whether there is a legitimate unfilled need for a state bank. Aside from the complex and potentially costly requirements of starting up a bank, he said, there could be an inherent policy conflict. He asked whether a state bank’s mission of doing social good would conflict with running a sound bank for profit, and whether politics might influence lending practices.

"We may not be making loans, we may be making investments," he said of a state bank, adding that with loans, the expectation is that the money will be repaid.

While Fujitani was measured in his opposition, others have been harsher. The Hawaii Credit Union League called the creation of a state bank that would also purchase troubled mortgages "an extremely dangerous concept, which would place taxpayer money at enormous risk."

State House Minority Leader Gene Ward (R, Kalama Valley-Hawaii Kai) has been incredulous over some of the details in the bills. Gov. Neil Abercrombie would be the board chairman of a clean economy bank, for instance. The seven-member board would also include appointees chosen by the AFL-CIO and Change to Win, a labor coalition.

Conservatives have already started with the "Bank of Abercrombie" jokes. Ward questioned whether the governor, who has a Ph.D. in American studies and a master’s degree in sociology, is qualified to serve as bank chairman.

At a hearing before the House Finance Committee last week, Ward tried to press Blake Oshiro, Abercrombie’s deputy chief of staff, on the governor’s position on the House’s proposal.

"Is your boss prepared to become the chairman of the board of the state bank of Hawaii?" Ward asked.

Oshiro, a former House majority leader, was diplomatic.

"I think it all depends on what is the will of the Legislature and what is the policy call, and at that point we will make the proper decision," Oshiro said.