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Lawmakers are advancing impeachment proceedings against Pena, questioning his ties to the digital lender Ueno.
Paraguay’s Congress has refused to accept President Santiago Pena’s resignation, pressing ahead with impeachment proceedings after the collapse of digital lender Ueno Bank.
President since 2023, Pena had attempted to resign on Thursday as millions of Ueno customers remained unable to access their accounts.
“I do so with the stability of our country, social peace and the need to preserve our democratic institutions in mind,” the conservative politician said in a recorded address.
But lawmakers declined to accept his resignation. The lower house voted 78-0 to impeach him, and the Senate opened impeachment proceedings, summoning him to appear on Friday.
A joint congressional session called to consider the resignation lost its quorum after lawmakers from Pena’s Colorado Party walked out, as it became clear there were not enough votes to accept it.
Horacio Cartes, a leader in the Colorado Party, had posted a statement on social media indicating the group supported Pena’s impeachment.
“We will not side with the theft of public, private and pension funds,” Cartes, a former president, wrote in his statement. “We must think of the people and the values we uphold in the Colorado Party.”
Denying Pena’s resignation is likely to heighten the legal jeopardy he faces.
Ordinarily, in Paraguay, presidents who leave office become senators for life, and they enjoy a degree of legal immunity from prosecution as members of the legislature.
But that status is not conferred if the president is convicted in an impeachment trial.
The political crisis erupted earlier this week, when Paraguay’s central bank announced that Ueno had fallen below the legal solvency ratio. Once its books were corrected, the bank’s capital – the cushion banks must keep to absorb losses – was less than half the legal minimum.
Before its collapse, the company claimed it had about 3 million customers, in a country of 6.5 million people. Many have since lost access to their accounts and to pensions paid out through the bank.
As part of a resolution to address the bank’s collapse, Paraguay’s central bank voted to transfer its remaining funds to other financial institutions.
But the central bank itself came under scrutiny for not properly regulating Ueno. The central bank’s head, Carlos Carvallo, has since resigned.
Pena himself formerly held a stake in Ueno’s parent company, Grupo Vazquez, though he said he sold those shares in 2025.
Lawmakers, however, have accused Pena of having a conflict of interest and have questioned whether there was an institutional cover-up linked to the lender’s collapse.
“He is accused of negligence at the very least and complicity in covering up the fact that the bank was insolvent,” said Al Jazeera’s Latin America editor Lucia Newman.
“As I speak, there are people outside urging Congress not to accept the resignation of the president because they say that they want him tried and impeached.”
Until its demise, Ueno had grown quickly from a niche company into a mid-tier bank administering close to $850m in public funds.
Paraguay’s attorney general has also ordered three criminal investigations into the bank’s collapse, which will look into oversight of the lender and the placement of public funds in the institution. Pena has said he will cooperate with investigators.
“My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfil its purpose, and that public funds – as well as the resources that belong to all Paraguayans – be protected,” Pena added in his address.
If Pena is ultimately removed from office, Vice President Pedro Alliana would likely take over as president.
Ueno has made no public statement on the issue.