WASHINGTON (AP) _ A savings and loan trade association has canceled its annual convention in Hawaii this year, thus avoiding television images of S&L executives lolling on palm-fringed beaches at a time when the industry is asking for the biggest taxpayer bailout in U.S. history.

''It would not be appropriate for us to hold a convention in Hawaii at a time when Congress and the administration are working to find a solution to this terrible crisis facing taxpayers,'' Bud Koch, chairman of the National Council of Savings Institutions, said in a statement Wednesday.

The council, the smaller of two main trade groups representing S&Ls, is taking a lesson from its larger rival, the U.S. League of Savings Institutions.

The league held its convention in November at a luxury hotel on Waikiki Beach in Honolulu. It said it went ahead with the meeting because it had been planned years in advance and would have been costly to cancel at the last minute. Nevertheless, the group endured criticism after television news reports showed executives on the beach and attending a lavish luau.

The council said would it would suffer ''substantial financial costs'' by canceling its meeting, which had been scheduled for May on the island of Kauai, but Koch said, ''Thrifts who are members of the national council ... have concluded that it would be wrong to conduct business as usual.''

President Bush's plan for bailing out the savings and loan deposit insurance fund would spend about $150 billion over the next 10 years. Most analysts say at least half of that would come from taxpayers. That exceeds the combined costs of the Marshall Plan aid to Europe after World War II and the bailouts of the Chrysler Corp., New York City and Lockheed Corp.

Koch said the council may schedule a special meeting in Washington in May to elect officers and take care of other business normally conducted at the annual convention.

In another development, one of three members of the Federal Home Loan Bank Board, the agency regulating S&Ls, announced his resignation effective Aug. 18. Lawrence White, appointed to the board on Nov. 12, 1986, is returning to teach at New York University's school of business.

Under the president's proposed S&L plan, the bank board would be reduced to a single chairman, who would report to the treasury secretary.