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I always use the PayPal option when available. As recently as a month ago, it would use BANK ACCOUNT on file if there were not enough funds in paypal balance. It no longer does that anymore? I have gone through all the settings. Did they change? You can only default choose bank account OR paypal balance. it would always take funds from bank account when paypal funds were drained. Why doesn't it do this anymore? and YES there is plenty of money in the bank.
Have you had a failed bank transfer or negative balance caused by a failure from that bank account?