Paraguay president resigns as lawmakers vote to impeach him

ASUNCIÓN, Paraguay — President Santiago Peña announced his resignation Thursday as the collapse of digital lender Ueno Bank left millions of Paraguayans unable to access their money. Minutes later, the lower house voted unanimously to impeach him, sending the charges to the Senate despite his decision to step down.

The 78-0 vote followed three days of protests in the capital and a loss of support for Peña within his Colorado Party. A two-thirds Senate majority is required to convict and formally remove him. Vice President Pedro Alliana is set to replace Peña; NPR reported that Congress was expected to accept the resignation Thursday evening and that Alliana would serve through August 2028.

In a video posted as lawmakers debated impeachment, Peña said he was stepping down for “the stability of our country, social peace and the need to preserve our democratic institutions.” He apologized “if I have failed” the public, but did not accept responsibility for the banking crisis. “It was never my intention to betray the trust they placed in me,” he said.

Peña, an ally of U.S. President Donald Trump, held a stake until last year in a company related to Ueno, according to NPR. Lawmakers accused him of conflicts of interest, misuse of pension funds and institutional cover-ups linked to the bank’s collapse, Al Jazeera reported. Peña said he wanted depositors’ money returned and public funds protected.

Ueno’s rapid expansion made it a major holder of public money. NPR reported that the bank said last month it held roughly $800 million in public deposits, about a quarter of its total. Al Jazeera put the public funds it administered at close to $850 million and said its roughly 3 million customers were unable to access their accounts.

The central bank seized Ueno on Tuesday after finding poorly documented loans to companies linked to its owners and expenses improperly counted as assets, according to NPR. Once its books were corrected, the bank’s capital fell below half the legal minimum. NPR said regulators planned to transfer customer accounts and assets of remaining value to other banks before liquidating what was left. The bank’s app, cards and transfers stopped working, and branches closed.

Central bank inspectors had found risky lending to insiders in June, according to the Paraguayan newspaper ABC Color, as cited by NPR. Peña had defended Ueno and the central bank’s oversight as recently as last month, dismissing concerns as a smear campaign. He had appointed Carlos Carvallo, formerly president of Ueno’s predecessor company, to lead the central bank. Carvallo resigned Wednesday at Peña’s request.

Officials said they had begun repaying depositors and opening accounts at other banks for about 280,000 people who had banked only with Ueno. Authorities 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, NPR reported. Lawyers for several detainees said they needed time to review the allegations. Al Jazeera reported that Ueno had made no public statement.

On Thursday, employees of Ueno and other companies in its parent group protested over unpaid wages and severance. Depositors, retirees, students and workers had also marched, demanding their money back and Peña’s removal. Police used pepper spray and rubber pellets against crowds Wednesday, according to NPR. “This is yet another assault on honest, hard-working citizens,” protester Belarmino Balbuena said.