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The same thing happened on the campus of my first university.
The rule arised from a member of one of the local sororities who was attempting to file a suit against the local sorority (which didn't even have any assets or anything to sue for) and the school since the local sorority didn't have anything. Personally, she never even came *close* to having a real case but it was enough for the administration to get thinking.
Since then 2 NPC groups have colonized, and I believe 1 of the 2 have already chartered. There is one remaining local, but from what I hear they will more than likely affiliate with another NPC soon due to pressure from the administration.
All the fraternities on the campus are nationally-backed chapters as well.
They basically felt that if the groups are backed by a national organization with policies they must adhere to, there would be less chances of problems with hazing, there would be insurance if they needed it, and an organization to back them if things went wrong.
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