Senate receives charges after Peña resigns; Pedro Alliana is set to succeed him
Paraguay’s lower house voted unanimously Thursday to impeach President Santiago Peña, minutes after he announced his resignation and after three days of demonstrations in Asunción. The 78-0 vote brought lawmakers from Peña’s Colorado Party together with the opposition. It sends the charges to the Senate, where a two-thirds majority is required to convict the president and formally remove him from office. The crisis followed Ueno Bank’s collapse, which froze savings, prompted protests by depositors, retirees, workers and students, and plunged a South American nation long prized by foreign investors for its stability into financial and political turmoil.
Congress was expected to accept Peña’s resignation formally at 5 p.m. and swear in Vice President Pedro Alliana an hour later. Alliana would serve out the remainder of Peña’s term through August 2028, with lawmakers expected to choose a new vice president.
Peña, whom the report described as a close ally of U.S. President Donald Trump, made the announcement in a video posted to X while lawmakers debated his impeachment. He said he was stepping down in the interest of “the stability of our country, social peace and the need to preserve our democratic institutions.” He expressed contrition but stopped short of accepting responsibility for the banking crisis. “I also want to apologize to the people if I have failed them at any point,” he said. “It was never my intention to betray the trust they placed in me.”
The decision came as thousands protested for a third day. Ueno had grown from an obscure finance company into a household name in less than five years. The lender said more than 60% of Paraguay’s adults were its customers. Depositors were seeking the return of savings and government pensions, while 7,000 employees affected by the closure were owed unpaid wages.
Ueno received its banking license in 2023 as a rebranded version of a decades-old finance company. It attracted customers with cash-back offers on groceries, grew to more than 70 locations, sponsored Paraguay’s national soccer team and put its name on the country’s main stadium. Peña held a stake in a company related to Ueno Bank until the previous year, and government money flowed into the lender.
Peña also appointed Carlos Carvallo, president of Financiera Ueno and Ueno Bank’s predecessor, to run the central bank, the agency responsible for supervising the digital lender. The report said Ueno’s rapid expansion unfolded amid the close proximity of the Colorado Party to Paraguay’s regulators and business elite, a weakness that had endured despite steady economic management and rapid growth that attracted foreign investors.
As of the previous month, Ueno reported holding roughly $800 million in public deposits, about a quarter of its total. The money included deposits from Paraguay’s state pension and health fund and from operators of the country’s large hydroelectric dams.
The central bank’s inspectors had raised concerns before the closure. ABC Color, a leading Paraguayan newspaper, reported in June that inspectors found risky lending to insiders. Ueno had extended large sums to companies tied to its owners beyond legal limits and without enough collateral to cover the debts if they went bad. On a single day in September 2025, nearly $39 million had gone to three such companies. Peña repeatedly dismissed the warnings, and as recently as the previous month, he defended Ueno and the central bank’s oversight while dismissing the concerns as a smear campaign designed to spook the public.
The findings that precipitated the collapse landed on Monday: regulators investigating Ueno’s loans to companies linked to its owners found poorly documented lending, the central bank said, as well as expenses the bank had wrongly counted as assets. Once the books were corrected, Ueno’s capital, the cushion banks must maintain to absorb losses, fell to less than half the legal minimum. The central bank seized the lender Tuesday and announced plans to move customer accounts and remaining assets with value to other banks before liquidating what was left.
Ueno’s app, cards and transfers went dark, and its branches locked their doors, leaving depositors lined up outside without a way to withdraw savings. A rush to open accounts elsewhere crashed mobile apps operated by other banks on Wednesday, fueling public panic. Officials appealed for calm and said they had begun repaying depositors and opening new accounts for about 280,000 people who had banked only with Ueno.
“The banking system is sound,” insisted Pedro Acosta Bernal, who was appointed interim central bank president Wednesday after Carvallo resigned at Peña’s request.
Authorities detained eight senior Ueno executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale. Prosecutors also charged 27 bank officials and business associates with offenses including breach of trust and attempted fraud. Lawyers for several of the detained said they needed time to review the allegations before commenting.
Hundreds of Ueno employees and workers from other companies belonging to Grupo Vázquez, the bank’s parent conglomerate, protested outside the Labor Ministry on Thursday. They demanded severance and unpaid wages while their jobs remained in limbo and their salaries were trapped at the failed bank. A day earlier, hundreds of retirees, depositors, university students and workers flooded the streets of Asunción.
“We want your head, Peña!” the protesters shouted. Their signs demanded Peña’s impeachment, called him “the enemy of savers” and pleaded “Give us back our money.” Riot police fired pepper spray and rubber pellets as they pushed back the crowds.
Many demonstrators regarded the collapse not just as the result of risky banking but as a case study in official corruption. “Santiago Peña and the Colorado Party have stolen all our savings,” said Luis Pineda, one of the protesters marching to Congress on Wednesday. “We are fed up with 70 years of plunder.” Another protester, Belarmino Balbuena, said: “This is yet another assault on honest, hard-working citizens, people whose small savings are the fruit of years of labor.”
On Transparency International’s latest perceived-corruption index, only Venezuela ranked worse than Paraguay in South America. At the national stadium that once bore Ueno’s name, the bank’s logo had already been scrubbed away. Across the capital, fresh graffiti denounced politicians as thieves.
The immediate political steps were expected to continue Thursday, with Congress scheduled to accept Peña’s resignation and Alliana due to take office. Separately, the central bank was preparing to transfer customer accounts and remaining assets, while criminal cases against Ueno officials and efforts to repay depositors continued.