Paraguay’s Congress rejects President Peña’s resignation and votes to impeach

Paraguay’s Congress refused to accept President Santiago Peña’s resignation on November 5, 2026, opting instead to advance impeachment proceedings following the sudden collapse of digital lender Ueno Bank. Al Jazeera reported that the 47-year-old president attempted to step down as millions of account holders lost access to their savings and government pensions, but lawmakers instead moved swiftly to strip him of office and any subsequent legislative immunity.

Lawmakers Reject Resignation and Vote to Impeach President

The political crisis escalated rapidly on Thursday when President Peña announced his resignation in a recorded address, stating he stepped down to preserve national stability and democratic institutions. Lawmakers in the lower house immediately rejected the maneuver, voting 78-0 to impeach him, according to Al Jazeera. The Senate then opened formal impeachment proceedings, summoning the president to appear on Friday.

A joint congressional session called to consider the resignation collapsed when lawmakers from Peña’s own Colorado Party walked out after realizing the votes to accept it were absent. Horacio Cartes, a leader in the Colorado Party and former president, stated that the group supported impeachment to protect public funds. Refusing the resignation strips Peña of the automatic Senate seat and legal immunity normally granted to outgoing presidents in Paraguay.

Opposition senator Rafael Filizzola called the case “the biggest fraud carried out from political power in the democratic era.” Protesters marched to Congress denouncing the government and Ueno Bank.

Central Bank Collapse Freezes Millions of Accounts

The financial turmoil began when Paraguay’s central bank announced that Ueno Bank had fallen below legal solvency requirements. Once regulators corrected the books, the lender’s capital cushion was less than half the legal minimum, triggering a seizure that froze the accounts of roughly 3 million customers in a nation of 6.5 million people.

Ueno Bank had grown aggressively since obtaining its banking license in 2023, expanding from an obscure finance company into one of the country’s largest lenders, claiming about 3 million customers. Long lines formed outside bank branches as desperate depositors attempted to withdraw funds, while a rush to open alternative accounts briefly crashed other mobile banking applications across Asunción.

Inspectors within the central bank had flagged risky insider lending patterns as early as June, discovering that Ueno had extended large sums to companies tied to its owners without adequate collateral. ABC Color, a leading Paraguayan newspaper, reported that nearly $39 million had flowed to three such companies on a single day in September 2025. President Peña, a former International Monetary Fund economist who previously held a stake in Ueno’s parent company Grupo Vazquez before selling his shares in 2025, repeatedly dismissed those warnings.

Criminal Investigations and Arrests Follow Default

Prosecutors announced investigations into authorities’ oversight of the bank, their handling of its failure and the placement of public funds in the lender. Authorities detained eight senior Ueno executives, including founder Miguel Vázquez and bank president Juan Manuel Gustale, while charging 27 bank officials and business associates with breach of trust and attempted fraud.

Central bank head Carlos Carvallo resigned in the wake of the scandal. To mitigate the panic, lawmakers rushed through emergency legislation to repay stranded depositors through a state guarantee fund, targeting small accounts first while promising coverage for the vast majority of clients.

If Peña is ultimately removed from office, Vice President Pedro Alliana would likely assume the presidency. Meanwhile, criminal proceedings in ordinary courts await those implicated once legislative protections are formally dissolved.