Top Democrats in the state House support creating a state bank — an idea the Occupy movement sees as an alternative to Wall Street.

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OLYMPIA — State government stores money at Bank of America, buys goods with U.S. Bank cards and distributes welfare aid through JP Morgan Chase ATMs.

Supporters of cutting such ties to big banks say the first step is to create a state-owned bank.

The idea of a state bank — a favorite of the Occupy movement that sees it as an alternative to Wall Street — has strong support among the Democrats who control the state House. Speaker Frank Chopp called it a top priority last week in a speech opening this year’s session of the Legislature.

“I think people see this as a form of empowerment, that we’re going to try to do something in our state to regain control over the safety of our finances,” said David Spring, a community-college instructor from North Bend who has spoken at Occupy rallies.

Skeptics wonder where the money would come from to accomplish the bank’s goals, such as making low-interest loans to college students and to local governments for public works.

Republican lawmakers and the Democratic state treasurer, Jim McIntire, say government programs already exist to do that.

The state Public Works Trust Fund loans hundreds of millions of dollars a year to local governments for infrastructure, and an alphabet soup of agencies has similar goals, including the Community Economic Revitalization Board, the Drinking Water State Revolving Fund and the Transportation State Infrastructure Bank.

Then there are federal student-loan programs.

“Why set up a whole new bureaucracy?” asked Rep. Barbara Bailey, R-Oak Harbor. “And one step leads to another step and next thing you know we have a full-blown financial institution that is in direct competition with our financial industry — which by the way is very good in this state.”

Spring said the problem with today’s crop of state programs is that the state has to tap into the banking system for its money instead of going directly to the Federal Reserve, as banks do.

The proposed Washington state bank is modeled on the 93-year-old, state-run Bank of North Dakota. Its champion in the Legislature is Rep. Bob Hasegawa, a Democrat whose district runs from Renton to South Seattle.

Hasegawa’s proposal last year went nowhere, but the House created a task force that he led. Members came up with scaled-back legislation that addresses worries about whether a state bank would run afoul of constitutional prohibitions about lending the state’s credit.

Hasegawa wants a bank with more authority but said it might require a change to the state constitution. This version, he said, will pass constitutional muster.

“The (Supreme) Court has said you can use the state’s credit for the public benefit or to support the poor and infirm,” he said.

The bill he introduced Friday has 44 sponsors, six shy of a majority in the House.

It would allow for student and infrastructure loans, and might also let the bank take over services related to welfare-benefits cards, now managed by JP Morgan Chase under a government contract. Chase charges welfare recipients 85 cents for ATM withdrawals using their benefits cards.

The governor, lieutenant governor and treasurer would make key decisions for the bank.

Hasegawa’s proposal could run into trouble in the Senate, where Democrats have a smaller majority. Leaders there say they’re interested, but they didn’t include it on a list of dozens of proposed changes they unveiled last week.

The bank also would need capital, and it’s unclear where that would come from, said Senate Majority Leader Lisa Brown, D-Spokane.

Spring said the state’s accounts have little uncommitted money, but McIntire’s office said capitalization would be a big challenge.

Chopp, D-Seattle, touted a state bank in his speech as a way to keep college students from having to pay 7 percent interest on loans, calling the proposed bank by its formal name, the Washington Investment Trust.

Even the name illustrates potential hurdles.

In a video posted to his Facebook page, Hasegawa said, “Even though the speaker supports the concept of the state bank, he says people really hate banks, but they also really hate the state — right now — so when you put the two of them together they’re really going to hate this.

“So (Chopp) said, ‘Come up with a different name,’ so we came up with this real warm and fuzzy name called the Washington Investment Trust.”

But lawmakers also can expect hearings packed with supporters — likely some of the activists who flooded the Capitol in November to protest budget cuts and highlight the gap between rich and poor.

“The Occupy people, they all want to know when the hearing is going to be,” Spring said.