The settings for disabling anonymous login and allowing local users where set in /etc/vsftpd.conf.
But the ftp server still refused to let me login with any of the users on the system. I tried remove and reinstall, but the problem persisted. Finally I found a thread where others had the same problem. And here’s how to fix the problem.
This fixed the problem for me. The only reason for me to have an ftp server on my machine is to do automatic updates of WordPress. The machine is behind a firewall so port 21 is not open to the world. For file upload I use sftp.