Members of a special Maryland Senate committee studying a proposed reform of state savings and loan law criticized the measure tonight as "overkill" legislation that would be too onerous for local thrift associations.

But Wilbur D. Preston Jr., who investigated the origins of the state's savings and loan crisis, defended his legislative proposal as a preventive measure to keep financial disaster from occurring again.

Preston, appearing before a newly formed Senate committee that will consider savings and loan legislation in the current session of the General Assembly, said his 183-page proposal would go far toward preventing the industry abuses that contributed to the crisis.

Preston's sweeping measure, which includes stiff criminal and civil penalties for violations, was formally filed today with minor changes by the administration of Gov. Harry Hughes.

"It's overkill," declared state Sen. James C. Simpson (D-Charles) at one point during the committee's two-hour meeting with Preston. Simpson objected to a provision in the proposal that would bar savings association officers or their families from receiving a loan from their association, unless it was a mortgage for the officer's residence.

Other senators echoed Simpson, saying the proposed ban on "insider" loans was far more stringent than comparable federal regulations. They contended that and other provisions would effectively drive Maryland savings associations out of a state-chartered system and into a federally regulated arena.

Preston, a Baltimore lawyer, and two colleagues argued that the proposal filled the regulatory and legal gaps that made the crisis possible. In addition to the ban on "insider" dealings, the measure would prohibit account owerdrafts and excessive fees and would place strict limits on other lending activities. State government regulators would also be granted broad new powers to police the thrift industry.

In other developments today, the assistant attorney general assigned to the state Division of Savings and Loan Associations announced he will resign within 60 days because of criticism he received in Preston's special report on the crisis.

John C. Cooper said he would feel "uncomfortable" giving legal advice to the S&L division after Preston criticized him as being too lax in his oversight of the industry.

Also, Lawrence B. Goldstein announced his resignation as head of the state Wetlands Administration to avoid a conflict of interest with his job as president of Gibraltar Building and Loan of Annapolis.

Gibraltar, Goldstein said, will soon ask the state Board of Public Works, which oversees the wetlands agency, for a pledge of money so it can obtain federal deposit insurance.