Preheat oven to 350°. In a small saucepan, melt butter; stir in flour, salt and pepper until smooth. Gradually whisk in milk. Bring to a boil, stirring constantly; cook and stir until thickened, about 2 minutes. Remove from heat; stir in cheese until melted., Coat an 8-in. square baking dish with cooking spray. Place half of the potatoes in dish; layer with 1/2 cup onion and half of the cheese sauce. Repeat layers. , Bake, covered, 50 minutes. Uncover; bake until bubbly and potatoes are tender, 10-15 minutes longer.