PayPal freezing accounts is NOT a thing of the past. My experience (noted above) was less than two years ago. Check out this FW thread about one going on RIGHT now.
PayPal is not a bank. PayPal is not FDIC insured. I still use it too, but NOT AS A BANK. Never keep more funds than you're willing to lose access to for weeks, if not forever, in PayPal.
Paypal account suspending Thread 