ASUNCION, Paraguay - Opposition lawmakers in Paraguay have filed articles of impeachment against President Santiago Peña after the collapse of Ueno Bank left roughly 3 million customers unable to access their accounts and placed hundreds of millions of dollars in public money at risk.

Thirty-five members of the 80-seat lower house submitted the accusation on Wednesday and requested an extraordinary session to debate the president's future. They accuse Peña of conflicts of interest, misuse of pension funds and an institutional cover-up linked to the fast-growing digital lender.

The opposition is still short of the two-thirds majority needed to advance impeachment, although Reuters reported that several dissident lawmakers from Peña's ruling Colorado Party have backed the effort. The party controls both chambers and has governed Paraguay for all but five years since 1947.

The political confrontation followed the central bank's decision to place Ueno into resolution after its solvency ratio fell below half the legal minimum. Resolution allows regulators to take control, assess assets and move deposits to other institutions before any remaining assets are liquidated.

Ueno says it has about 3 million customers in a country of roughly 6.5 million people. It also administers between $800 million and $850 million in public funds, including about $380 million invested by Paraguay's state pension and health fund.

Customers were unable to withdraw or transfer money after the intervention. Police guarded closed branches as depositors sought information, while disruptions at other banking apps added to concern about confidence in the wider financial system.

Most Ueno depositors are expected to be fully protected. Paraguay's deposit-insurance fund covers up to 228.3 million guaranies, about $38,000, per person, which preliminary estimates suggest is enough for about 97% of customers. Regulators said an initial payment of up to 10 million guaranies, around $1,700, would be made, but they did not give a date.

Authorities have detained eight Ueno executives as prosecutors investigate suspected breach of trust and other offenses. The central bank chief, Carlos Carvallo, resigned at Peña's request. Carvallo had previously led Ueno's predecessor, a connection that critics had long described as a conflict of interest; the regulator has said he recused himself from Ueno decisions.

Peña also had a direct business relationship with Grupo Vazquez, the conglomerate that controls Ueno, until March 2025. The president has urged political leaders to prioritize depositors and said anyone responsible for wrongdoing would face justice without exceptions. His office did not immediately answer Reuters' request for comment on the impeachment filing.

When political connections become a financial risk

A bank failure is never only about a bad balance sheet when the institution holds the savings of nearly half a country's population and manages money intended for pensions and public health. It becomes a test of whether regulators acted early enough, whether public funds were placed responsibly and whether political access weakened normal scrutiny.

Ueno's expansion should now be reconstructed in public. The central bank said it warned the lender in June that it was extending too much credit to companies linked to its owners. Fitch Ratings moved the bank's outlook to negative last month, citing rapid balance-sheet growth and a high level of intangible assets. Less than a week before intervention, Ueno was still discussing a $100 million capital raise.

Those warning signs make the collapse more damaging. The central question is not merely why Ueno failed, but why state agencies and pension managers continued entrusting it with such large sums while concerns about ownership, capital and connected lending were visible.

Peña's past partnership does not by itself prove misconduct. Nor does the impeachment filing establish that he committed an offense. But democratic accountability requires more than asking the public to trust that officials separated private relationships from public decisions. It requires records showing who approved deposits, what risk assessments were made and whether regulators faced political pressure.

Paraguay had been promoting itself as a stable, low-tax destination for regional investment and recently achieved investment-grade credit ratings. That reputation depends on institutions applying the same rules to politically connected companies as to everyone else. Preferential treatment may help one firm grow quickly, but when the firm fails, the cost spreads to depositors, pensioners, taxpayers and every bank facing nervous customers.

The immediate priority is restoring access to insured deposits and protecting pension payments. The longer task is independent investigation, legislative oversight and publication of the bank's true condition. An impeachment vote may succeed or fail on party arithmetic; the demand for answers should not.