Sign up Disabled? Directory Plugin Theme

For some strange reason it won't allow me to "Sign up" nor "Sign in" using the form on the Directory plugin/theme. I have checked the box in settings that say "Anyone can register' but it still says the following on "Sign up" page of the Directory Theme

"This feature is currently disabled by the system administrator."

I don't know why it is saying this. So I added a test user from Dashboard and tried signing in on the theme but it says incorrect username. What am I missing? Thanks!

Mike