In a saucepan, melt the butter. Stir in flour, salt and pepper until smooth. Gradually stir in milk. Bring to a boil; cook and stir for 2 minutes or until thickened. Reduce heat. Stir in cheese until melted. In a 2-1/2-qt. microwave-safe dish coated with cooking spray, layer a third of the potatoes, onion and cheese sauce. Repeat the layers twice. Cover and microwave on high for 25-30 minutes, stirring every 5 minutes until the potatoes are tender.