MANAGEMENT'S REPORT ON THE EFFECTIVENESS OF THE INTERNAL
          CONTROL STRUCTURE RELATIVE TO THE SERVICING OF
                        HOME EQUITY LOANS


The management of the Bank is responsible for  establishing  and maintaining the
internal control  structure.  In fulfilling this  responsibility,  estimates and
judgments by management are required to assess the expected benefits and related
costs of control procedures. The objectives of an internal control structure are
to provide management with reasonable,  but not absolute,  assurance that assets
are safeguarded  against loss from  unauthorized  use or  disposition,  and that
transactions  are executed in accordance  with  management's  authorization  and
recorded  properly  to  permit  the  preparation  of  financial   statements  in
accordance with generally accepted accounting principles.

We have performed an evaluation of the effectiveness of the Bank's internal
control  structure  based on the  criteria  established  in  Internal  Control -
Integrated Framework issued by the Committee of Sponsoring  Organizations of the
Treadway  Commission  ("COSO")  relative to the  servicing  of home equity loans
owned by the Chevy Chase Capitol Home Equity Loan Trusts 1990-1, 1991-1, 1992-1,
1993-1,  1994-1 and 1995-1 (collectively  referred to as the "Trusts" herein) as
of September  30,  1996,  and we have  determined  that the Bank  maintained  an
effective  internal control structure over financial  reporting  relative to the
servicing of home equity loans owned by the Chevy Chase Capitol Home Equity Loan
Trusts as of September 30, 1996.

However,  there are inherent  limitations in the  effectiveness  of any internal
control   structure,   including  the   possibility   of  human  error  and  the
circumvention or overriding of controls. Accordingly, even an effective internal
control  structure  can  provide  only  reasonable  assurance  with  respect  to
reliability of financial  statements and  safeguarding and management of assets.
Furthermore, the effectiveness of any internal control structure can change with
changes in circumstances.


John N. Sousane                                George P. Clancy    
---------------                                -------------------
John N. Sousane                                George P. Clancy
Vice President                                 Executive Vice President



Stephen R. Halpin, Jr.
----------------------
Stephen R. Halpin, Jr.
Executive Vice President
Chief Financial Officer


December 20, 1996                            

<PAGE>


            REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors of
Chevy Chase Bank, F.S.B.:

We  have  examined   management's   assertion,   included  in  the  accompanying
Management's  Report on the  Effectiveness  of the  Internal  Control  Structure
Relative to the  Servicing of Home Equity Loans,  that Chevy Chase Bank,  F.S.B.
(the "Bank")  maintained an effective  internal control structure over financial
reporting  relative to the  servicing  of home  equity  loans owned by the Chevy
Chase Capitol Home Equity Loan Trusts (1990-1,  1991-1,  1992-1, 1993-1, 1994-1,
and 1995-1, collectively referred to as the "Trusts" herein) as of September 30,
1996.

Our  examination  was  made in  accordance  with  standards  established  by the
American  Institute of Certified Public Accountants and,  accordingly,  included
obtaining an  understanding  of the internal  control  structure  over financial
reporting, testing, and evaluating the design and operating effectiveness of the
internal control structure, and such other procedures as we considered necessary
in the  circumstances.  We believe  that our  examination  provides a reasonable
basis for our opinion.

Because of inherent  limitations in any internal  control  structure,  errors or
irregularities  may  occur  and  not  be  detected.  Also,  projections  of  any
evaluation of the internal control structure over financial  reporting to future
periods are subject to the risk that the internal  control  structure may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion,  management's  assertion  that the Bank  maintained an effective
internal control structure over financial reporting relative to the servicing of
home  equity  loans owned by the Chevy Chase  Capitol  Home Equity  Trusts as of
September  30, 1996,  is fairly  stated,  in all material  respects,  based upon
criteria  established in Internal  Control - Integrated  Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).

This  report is  intended  solely  for the  information  and use of the board of
directors  and  management  of the  Bank,  Chemical  Bank  and  Capital  Markets
Assurance Corporation and should not to be used for any other purpose.


Arthur Andersen LLP
-------------------
Arthur Andersen LLP



Washington, D.C.
December 20, 1996