Form factors in the nucleon-photon vertex with one off-shell nucleon are calculated by dressing the vertex with pion loops up to infinite order. Cutting rules and dispersion relations are implemented in the model. Using the prescription of minimal substitution we construct a \gamma \pi N N vertex and show that it has to be included in the model in order that the Ward-Takahashi identity for the \gamma N N vertex be fulfilled. The vertex is to be applied in a coupled-channel K-matrix formalism for Compton scattering, pion photoproduction and pion scattering. The form factors show a pronounced cusp structure at the pion threshold. As an illustration of a consistent application of the model, we calculate the cross section of Compton scattering. To provide gauge invariance in Compton scattering, a four-point \gamma \gamma N N contact term is constructed using minimal substitution.