[ASTalumna06]

Yes, this happened at my school. Sigma Kappa Nu, or the SKNs (pronounced as "skins") were forced to go national, but they chose not to, and they are no longer recognized by campus. However, they do still attend some Greek events, they have a house and host parties that are attended by many students, and they have an annual football game that they play against Delta Chi (which they used to play against KDR up until 3 years ago). They are still prominent on campus, they still wear their letters, they do still recruit and get new members (although no one is really sure how) and they show up at Greek events open to all students, but they can not actively participate in them.

As CrackerBarrel mentioned, one of the main reasons for my campus doing this was the concern with a lack of insurance. It's a liability issue for the school that they don't want put on their shoulders.

And actually, the Delta Chi chapter was originally a local fraternity, Beta Upsilon Nu (or the BUNs! haha) and they chose to go national, although I'm not sure if this was a result of pressure from the university.