Ally Ally Financial, Ally Bank Conducts Business in USA, But Customer Service is Never In the USA Sedgwick, Kansas Kansas

Ally is not your problem here.  By your own words, Ally sent the release to the DMV and the DMV confirmed that. 

In effect you seem to think that Ally is responsible for getting you the title.  So what do you want them to do?  They can't apply for a duplicate title because as far as the DMV is concerned they have no right to the title anymore.   So you need to apply for it regardless. 

Do you want them to pay the fee?  Why?  Did they not send the release to the DMV..NO they did.   Are they responsible for mailing out the title..NO that is the job of the DMV.  So what did they do wrong that would require them to pay for any extra expenses?

Now, you see you can claim that they "should" do it as a customer service thing.  However, if that is where you are going while that would be nice.  But if they don't do that, they are not ripping you off.