Former Gov. Bruce Sundlun yesterday advises the nation’s leaders, “Number one, get control of the banks.”

PROVIDENCE — The former governor who in 1991 confronted the state’s worst banking crisis has some straightforward advice for members of the U.S. House of Representatives — show some leadership.

“I would tell them to take whatever steps they needed to keep the banks open,” said Bruce Sundlun, the millionaire businessman who led Rhode Island out of the abyss created by the collapse of the Rhode Island Share and Deposit Indemnity Corp.

“That’s why you’re elected, that’s what we expect of you in a crisis — leadership. I don’t think we’ve had it.”

Today, the House is due to take up a massive plan to shore up the U.S. financial system as the Bush administration warns that Congress’ failure to act will have dire consequences for the economy.

The House takes up the proposal less than a week after defeating a similar financial-aid package.

“I thought the politicians in Washington were doing a good job until the House turned this thing down,” he said. “It was destructive, not constructive at all.”

The U.S. Senate revived the plan and Wednesday approved a revised proposal that calls for spending up to $700 billion to buy bad assets from faltering financial institutions.

The Senate bill would extend an array of tax breaks worth $100 billion to businesses and families next year. It would also temporarily increase the limit on federal insurance for bank deposits from $100,000 to $250,000.

For weeks, Americans across the political spectrum have criticized congressional leaders and the Bush administration for mishandling a financial crisis that got its start in the mortgage sector. In e-mails and blogs, on radio call-in shows and street protests, many expressed anger about what they perceive as a bailout for wealthy corporate executives who raked in millions of dollars as they hurtled unsophisticated borrowers and the country toward a financial abyss.

The situation across the nation this fall is not unlike the one that unfolded in Rhode Island during the waning days of 1990.

When Sundlun, then 69, defeated Republican incumbent Ed DiPrete for governor in 1990, he inherited a budget deficit of almost $200 million and a ticking time bomb — the state’s private banking system was collapsing.

Hours after taking office on Jan. 1, 1991, Sundlun declared an extraordinary “banking emergency,” freezing almost $2 billion held by 350,000 depositors at the 45 banks and credit unions insured by the Rhode Island Share and Deposit Indemnity Corp.

In the days and weeks afterward, Rhode Islanders took to the streets.

Some burned him in effigy.

Unbowed, he pushed government and business leaders to resolve the crisis, eventually engineering a plan that restored depositors’ money.

Even now, at 88, recalling the crisis brings out his temper. An expletive crossed his lips when the subject was brought up.

But he counts his resolution of the RISDIC crisis among his proudest achievements.

In an interview yesterday inside the Rhode Island Convention Center, where he attended a breakfast of the Rhode Island Commodores, a privately funded coalition of business and civic leaders, Sundlun talked about what transpired in 1991 and what lessons federal officials might take away from it.

Foremost, he said, he would employ the same strategy again.“I knew it was going to work,” Sundlun said.

Closing the banks and credit unions was an “unfortunate requirement” to set a resolution in motion and to rebuild the state’s economy, he said.

“It showed the people they had a governor who would do something to straighten out the situation,” Sundlun said. “I couldn’t have done anything if I hadn’t done that.”

He suggested the nation’s political leaders do the same now.

“Number one, get control of the banks,” he said. “If the government is in charge and has the confidence of the people then the government can do what is necessary.”

In the aftermath of the closures, which lasted only a few days in the case of most institutions, he employed a number of tactics to resolve the crisis, among them asking the head of Brown University to review the RISDIC matter, creating a commission to investigate the doings of bank officers and executives, hiring an out-of-state firm to sell off assets at the failed institutions and borrowing money to help pay back depositors who lost money when the private insurer collapsed.

Having Vartan Gregorian, who had been Brown’s president for only a year, review the state’s banking situation helped take the politics out of what he’d done, Sundlun said.

“[Depositors] might have thought I was being political but they wouldn’t have thought that of him,” said the former governor, a Democrat.

While the U.S. Senate has acted appropriately, he said, members of the U.S. House have yet to show they can rise above politics to help solve the nation’s financial problems.

He complimented Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson for addressing the financial crisis, but he derided President Bush.

“I would think more of Paulson if I knew that Paulson was carrying out the orders of his boss,” Sundlun said. “He’s the secretary of the treasury. The secretary of the treasury usually takes his lead from the president — I don’t think that’s the case.”

As for the two men vying to replace President Bush in January, he suggested that bipartisanship is the way to help the nation.

“McCain and Obama ought to get together,” Sundlun said. “Whoever loses ought to help the guy who wins.”

pgrimald@projo.com