The pam_console.so module uses the /etc/security/console.perms file to determine the permissions for users at the system console. The syntax of the file is very flexible; you can edit the file so that these instructions no longer apply. However, the default file has a line that looks like this:

<console>=tty[0-9][0-9]* vc/[0-9][0-9]* :[0-9]\.[0-9] :[0-9]

When users log in, they are attached to some sort of named terminal, which can be either an X server with a name like :0 or mymachine.example.com:1.0, or a device like /dev/ttyS0 or /dev/pts/2. The default is to define that local virtual consoles and local X servers are considered local, but if you want to consider the serial terminal next to you on port /dev/ttyS1 to also be local, you can change that line to read:

<console>=tty[0-9][0-9]* vc/[0-9][0-9]* :[0-9]\.[0-9] :[0-9] /dev/ttyS1