Michigan MAC History
The MAC’s activities initially began in April 1931 with an expanding financial and fiscal crisis among many cities, villages, schools and county governments. There was no agency in the State of Michigan focused on resolving conflicting interests of municipalities and creditors.
In fact, uniform standards of disclosure or financial statement comparability were unheard of at the time. Complicating matters, municipal records were hard to read, and state bond laws at times made interpretation difficult, which led to frequent challenges in court.
As defaults occurred and confusion grew, a number of banks, broker-dealers, trust departments and insurance companies conceived the idea that an agency should be organized – to bring facts concerning municipal bond defaults and key financial information together in a centralized place. An organized effort ensued – to underwrite an organization chartered with the task of gathering and clarifying this information for creditors and debtors.
By October 1932, the MAC incorporated as a not-for-profit membership association. The MAC initially began to counsel distressed local governments on how to improve their business operations. Other activities soon included providing direct operating loans to school districts, cities and townships. Refunding and restructuring debt soon followed.
During the mid-1930s the MAC cataloged the outstanding bond and note indebtedness of all municipalities in southeastern Michigan. Reports (bulletins) were distributed to Members when a new series of debt was to be issued. A “bulletin” capsuled the bond details of an offering and a summary of the economic characteristics of the Issuer community – a novel idea at the time. Consistency of format, including direct debt, overlapping and indirect debt of an Issuer – for a fair comparative credit analysis form one Issuer to the next – soon was a hallmark of the Securities Act of 1933. The new issue MAC Report of today continues to embrace a consistent format of information for investors, underwriters and analysts – an important benefit of membership.
Transition into the 21st Century
Prior to present day computers and memory to store data on servers, the MAC annually produced soft cover 8 ½”x11” books – distributed to Members – representing the debt of all Michigan’s general obligation and all revenue bond issues.
By the late 1990s the MAC was investing in computers and the conversion of data into digital form. The first internet web site was created in 1998. More recent investments in hardware and software infrastructure has allowed the MAC to expand data and reporting; improve firewalls; and create systems backup and provide state of the art transmission as a benefit of membership.
The MAC’s 8 ½”x11” soft cover books, the once coveted cornerstone for every underwriter, investment banker, financial advisor and credit analyst’s desk top are now mementos of the past.