This study explores the problems which confronted the Credit Department of the Farmer¡¦s Association, such as uncertainty regarding administrative goals and political scandals after the Democratic Progressive Party (DDP) had planned for the Association to be taken over by banks in 2000. The Farmer¡¦s Association is the best organized association that is close to the people. With more members than all of the other associations, it also plays an important role in a wide range of areas, such as: the economy, society, education, and politics. In earlier times, it was the only association that provided financial services for the common people. Due to the capital resources and the support of people, it has long been a target for the local factions. After retreating to Taiwan, the Kuomintang endeavored to stabilize the economy of the rural areas and fulfill public policies by carrying out the national economic goals. With this policy in mind, the Farmer¡¦s Association actively allied with the local factions to become a monopolistic enterprise on a scale similar to that of state-owned enterprises. The Association and the Government thus behaved according to the patron-client relationship and the Association acts for the Government in implementing agricultural policies in local areas. The political parties and social elites all endeavor to lead the Association, in the hope that it can serve as the basis for political mobilization. Therefore, the Association deviates from its own administrative purpose and becomes entangled in the power struggles of the local factions. These factors, plus the Asian economic storm led to bank runs. As the DDP took over the reins of government, it decided to settle such problems in order to stabilize the financial market, or based on some political concerns, by taking over similar associations and planning to completely stop the operation of the Credit Department. The Association in Dashu Township is taken as an example, to explore the impacts and influences of the Farmer¡¦s Association without the Credit Department on the local factions that have long relied on the resources of Credit Department. The analysis will be based on four perspectives: 1. Change of mobilization capability 2. Change of the power of Association director-generals 3. Change of the Association¡¦s control of local financial resources 4. The change of local factions¡¦ power The taking-over of the Association aroused drastic opposition. The Government therefore resorted to amending the laws concerning the Farmer¡¦s Association in order to revive it. But in 2008, the Kuomintang, after taking on the reins of government, amended the law to cancel the limitation concerning the office term of director- generals. With no limitations placed on civil servants serving as the staff of the Association it became difficult for the Association to rid itself of the power of local factions.