Wow, my HOAs never charged a fee to process. ACH saves late payments, gives cash flow predictability, and saves them the wages of whomever processes the check deposits. So the bank may charge an ACH processing fee, but it's less expensive than having an employee depositing checks (wages+employment taxes+benefits). This fee is just a revenue generator for them.

I'd set up a bill pay through your bank (if it's free) or mail them a check (the stamp is still cheaper than the fee). Just to force them to eat the time and expense of processing that check.

I'd go with the screen shot fight, but if it doesn't work, don't withhold your payments. The ramifications aren't worth it. Eat it and move on.