Synchrony Financial has received a key approval from the Federal Reserve System Board of Governors to become a standalone savings and loan holding company, according to a press release issued by Synchrony.
The approval marks a major step for Synchrony to become a fully independent company.
Synchrony adds in the press release that the next step will be for General Electric (GE) to announce the proposed exchange offer.
In this proposal, GE will be offering its shares of Synchrony common stock in exchange of GE common stock.
Margaret Keane, the president and CEO of Synchrony, said in the press release that they are now closer to becoming an independent company.
"This approval is a critical step in becoming a standalone business," she said. "The teams have done a tremendous job in preparing the business for separation, and I look forward to continuing to work with our teams toward that goal."
The Wall Street Journal adds that approval also allows GE to fully exit from the operation of Synchrony.
GE said in 2013 that it plans to spin-off the business as part of the company's effort to decrease the size of GE Capital, its financial service unit.
The Wall Street Journal adds that the spin-off also allows GE to accomplish two goals, the reduction of the number of its outstanding shares and the reduction of its footprint in financial services.
Investors have been uneasy with GE's financial service unit ever since GE Capital was buffeted by the financial crisis.
Months following its IPO, Synchrony have been building into a company that is strong enough to stand on its own, according to The Wall Street Journal.
The company is now strong enough to be independent of the backing of GE Capital.
The Fed told The Wall Street Journal that Synchrony is the 36th largest depository organization in the U.S.
The company has nearly $36 billion in deposits and a total asset of more than $75 billion.
The Wall Street Journal adds that GE and its subsidiary owns close to 85 percent of Synchrony's stocks.
