I found another site that swears if I go to the /etc/pam.d/system-auth and add the comments below users who fail to login with the correct password would get locked out after 5 failed attempts. Do the lines below look about right?
auth required /lib/security/$ISA/pam_tally.so onerr=fail no_magic_root
account required /lib/security/$ISA/pam_tally.so per_user deny=5 no_magic_root reset