Consumer organizations, warning against "a new era of loan sharking," urged Congress last week not to remove all state usury laws limiting charges for consumer credit.

Jim Boyle of the Consumer Federation of America cited examples of interest rates of over 200 percent on loans in states that recently have eliminated ceilings or raised them to very high levels. He told of used-car loans at 50 percent interest and second-mortgage refinancing loans at 100 percent in Arizona, 170 percent interest on Oklahoma loans, 200 percent on small loans in Texas, and 208 percent on appliances bought in New York City.

Often the true interest rate is much higher than the nominal rate, because origination fees and prepayment penalties, which add to the total cost of the loan, are easily overlooked by consumers.

Boyle's pleas came during a Senate Banking Committee hearing on a bill to pre-empt all state usury ceilings on business, agriculture and consumer credit transactions and authorize certain credit-card usage fees.

Six states have abolished usury laws. The vast majority -- 39 states -- have interest-rate ceilings ranging from 15 to 33 percent. Five states are below 15 percent, Arkansas being at the bottom with 10 percent. The 10-percent rate was written into Arkansas' constitution 100 years ago and has remained fixed despite four referenda to raise it.

Many people have to go out of state to borrow money, because the rate is so low it discourages lenders, according to testimony. So dire is the Arkansas lenders' situation that Sen. Christopher Dodd (D-Conn.) yesterday dubbed the proposed bill the "Arkansas Relief Act."

Most of the testimony came from industry representatives who argued for the necessity of federal pre-emption.

American Bankers Association President Lee Gunderson declared, "With increasing costs of funds to financial institutions and upward pressure on interest rates, banks located in states with restrictive usury ceilings are unable to meet the credit needs of their customers."

Although federal pre-emption of state laws is always a touchy subject for lawmakers, many of the committee members' questions reflected their general sympathy with the lending industry's position.