Has anyone set up any procedures to determine when a new ITIN expires? Is this something we even need to monitor for?

I was wondering the same thing but haven't been able to locate any guidance on this.

I don't think the ITIN has an expiration date but I think you need to consider if the individual should actually have a SSN; this is the reason for my separate post about an individual with an ITIN but who is working and I would really appreciate any feedback on my question.

Effective January 1, 2013, new ITINs will expire after five years. Under prior policy, ITINs had no expiration date. Taxpayers who still need an ITIN will be able to reapply at the end of the expiration period.

I would say, no, based on impossibility. As they have not announced any mechanism based on the numbering system to determine the year of issuance, there is no way a bank would know that a number had expired unless it required a copy of the letter assigning the number or verified the name/TIN combination through IRS "e services."

Moreover, for CIP purposes, if a bank also required a number assigned by the customer's country of origin; e.g. a passport number, it would still be in compliance with the CIP regulation even if the ITIN had expired.

It is feasible that when an "expired" ITIN was used for information reporting (probably on a 1042S) a bank could receive an error notice from the IRS. There would be some inequities in assessing a reporting penalty on a bank in this circumstance.

The IRS has since announced that the ITIN will expire only when it has not been used in connection with an income tax return...

It's still not the bank's job to track it and this just elevates the "impossibility" factor.