Comp time regulations/restrictions seem to apply only to work weeks longer than 40 hours. Our church has several part-time positions. Though each has a "regular" work week (32 hour max), some will often work extra hours, but never to exceed 40 hours during any given week. We allow each to accrue these extra hours in a "comp-time" account that they can draw on when work schedules are lighter.

Since work weeks in our situation are limited to 40 hours, and the definition of "compensatory time" refers only to work weeks longer than 40 hours, is it legal to continue this comp-time policy?

No, is the simple answer. Comp time is only authorized to public agency employees only, not to private employers.

§ 553.21 Statutory provisions.
Section 7(o) provides as follows:

(o)(1) Employees of a public agency which is a State, a political subdivision of a State, or an interstate governmental agency may receive, in accordance with this subsection and in lieu of overtime compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required by this section.