Paraguay's President Impeached by Unanimous Vote After Resigning Over Bank Collapse

Paraguay's lower house of Congress voted unanimously on Thursday to impeach President Santiago Peña, a decision made just minutes after he announced his resignation. The 78-0 vote marks the end of Peña's tenure after the collapse of Ueno Bank, a major digital lender, froze the savings of millions of citizens and triggered three days of protests in the capital, Asunción.

The impeachment vote sends formal charges to the Senate, where a two-thirds majority is required to convict and remove the president. Lawmakers from Peña's long-ruling Colorado Party joined opposition members in backing the move. The political shift followed demonstrations that rocked the capital this week as residents attempted to recover lost funds, wages, and pensions from the failed bank.

Peña, a close ally of U.S. President Donald Trump, posted a video to X announcing his departure while lawmakers debated his fate. He stated he was stepping down for the stability of the country and to preserve democratic institutions. Until last year, the president held a stake in a company related to Ueno Bank. He expressed contrition in the video, saying, "It was never my intention to betray the trust they placed in me," though he did not formally accept responsibility for the banking crisis.

Congress is expected to formally accept Peña's resignation at 5 p.m. on Thursday. Vice President Pedro Alliana is scheduled to be sworn in as president one hour later. Alliana will serve out the remainder of Peña's term, which ends in August 2028. Lawmakers are also expected to select a new vice president.

Ueno Bank grew from an obscure finance company to a household name in less than five years, claiming more than 60% of Paraguay's adults as customers. The bank held roughly $800 million in public deposits as of last month, including funds from state pension and health programs and operators of national hydroelectric dams. The collapse left 7,000 employees without unpaid wages and left depositors scrambling to access their money.

Regulators seized the bank on Tuesday after inspectors found risky lending to companies tied to the bank's owners. Central bank officials reported that Ueno had extended large sums to these entities beyond legal limits and without sufficient collateral. On a single day in September 2025, nearly $39 million went to three such companies. Once regulators corrected the bank's books, its capital fell to less than half the legal minimum required to absorb losses.

The central bank moved Ueno's customer accounts and remaining assets to other banks before liquidating the rest. The bank's app and cards went dark, and branches locked their doors, leaving depositors in long lines. A rush to open accounts at other banks crashed those institutions' mobile apps on Wednesday. Officials have begun repaying depositors and opening new accounts for approximately 280,000 people who banked exclusively with Ueno.

Authorities have detained eight senior Ueno executives, including founder Miguel Vázquez and bank President Juan Manuel Gustale. Prosecutors charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud. Pedro Acosta Bernal, who was appointed interim central bank president on Wednesday, insisted that the banking system remains sound despite the turmoil.