In other words, they're saying the businesses aren't profitable enough to service debt loads that were thought to be sustainable debt loads a few years ago.

That still points to lower than expected retail profit. Interest rates have been unusually low for more than a decade, so it's not like a credit spike changed the assumptions.

Anyway, at best it contributes to a negative feedback loop.

No, the debt was never sustainable. Essentially the banks allowed loans which were gigantic ponzi schemes.

Retail: "Our growth will continue forever!"

Banks: Hmm, we got bit pretty hard on these home loans and need somewhere else to make money, "Forever growth is like infinite money, I like money!", "Here is 10 billion dollars, just remember to pay us back in 2017".