Paraguay's President Santiago Peña waves after a meeting with Venezuela's interim President Delcy Rodriguez at the Miraflores Presidential Palace in Caracas, on September 19, 2026. Federico Parra/AFP via Getty Images hide caption

Federico Parra/AFP via Getty Images

Paraguayan President Santiago Peña was impeached and placed under house arrest Friday after the collapse of a prominent U.S.-owned bank with ties to Paraguay's government. The fallout has left millions across the country without access to their money.

Peña is one of Washington's closest allies in the region and was a shareholder in Ueno Bank, a digital lender that served about 3 million customers — more than half of the country's adult population.

He was known as a pro-market leader focused on making it easier to do business in the country, but legislators said he jeopardized state assets and benefitted himself through his connection to the bank.

Ueno Bank previously said more than a million people opened bank accounts for the first time using its services, which included generous cash back offers on groceries.

A trial has proceeded against Peña, and he appeared before prosecutors Saturday morning. The last president ousted from office was Fernando Lugo in 2012. 

Peña has denied any wrongdoing but on Thursday he announced his resignation. Lawmakers refused to accept that resignation, and instead moved forward with the country's impeachment process.

At proceedings inside the country's Senate Friday, legislators unanimously found Peña guilty of malfeasance in office, according to the Senate's website.

Prosecutors then accused him of a breach of trust, among other charges, before placing him under house arrest.

"I want to apologize to the Paraguayan people if I have failed you," Peña said in a speech posted to social media.

Demonstrators burn an image depicting Paraguay's President Santiago Pena, during a protest over the banking crisis and his resignation, at the main square in the surroundings of the National Congress in Asuncion, on November 5, 2026. Daniel Duarte/AFP via Getty Images hide caption

Daniel Duarte/AFP via Getty Images

Pedro Alliana, the country's vice president, was sworn in as president to serve out the rest of Peña's term until August 2028. In a speech on Friday, he announced he would take action to compensate people whose money was lost in the bank's collapse.

Paraguay's central bank said it seized control of Ueno Bank on Tuesday because its solvency ratio, an assessment of a company's long-term financial viability, no longer met legal standards.

Protests erupted across Asunción, the country's capital city, following the seizure.

NPR's John Otis and Catherine Osborn contributed reporting to this story.